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THE ACQUISITIVE SOCIETY

THE

ACQUISITIVE SOCIETY

BY
R. H. TAWNEY

Fellow of BaUiol College, Oxford.

LONDON

G. BELL AND SONS Ltd.

1922

First Piiblished April 1921
Reprinted August 1921
January 1922

To my Wife

^he author desires to express
his acknowledgements to the
Editor of the Hibbert Journal
and to the Fabian Society
for permission to incorporate
in this hook the pamphlet^
" l^he Sickness of an Ac-
quisitive Society " published
by them.

CONTENTS.

IHAPTER PAGE

I Introductory . . . . i

II Rights and Functions . . 9

III The Acquisitive Society . . 23

IV The Nemesis of Industrialism . 36
V Property and Creative Work . 55

(a) The Traditional Doctrine.

(b) The Divorce of Ownership and Work.

(c) Property and Security.

(d) The Tyranny of Functionless Property.

VI The Functional Society . . 96

VII The Liberation of Industry . 105

{a) Industry as a Profession.

(b) The Extinction of the Capitalist.

(c) Nationalization as a Problem in
Constitution-making.

VIII The "Vicious Circle" . . 157

IX The New Condition of Efficiency 173

(a) The Passing of Authority from the
Capitalist.

(b) The Appeal to Professional Feeling.

(c) The need of a new Economic Psychology.

X The Position of the Brain

Worker .... 202

(a) The Growth of an Intellectual Proletariat.
{b) The Position of the Mine-Manager under

Nationalization.
(c) The Increasing Separation of "Business"

and Industry.

XI Porro Unum Necessarium . .222

THE ACQUISITIVE SOCIETY

I

INTRODUCTORY

It is a commonplace that the characteristic virtue
of Englishmen is their power of sustained practi-
cal activity, and their characteristic vice a re-
luctance to test the quality of that activity by
reference to principles. They are incurious as
to theory, take fundamentals for granted, and
are more interested in the state of the roads than
in their place on the map. And it might fairly
be argued that in ordinary times that combina-
tion of intellectual tameness with practical energy
is sufficiently serviceable to explain, if- not to
justify, the equanimity with which its possessors
bear the criticism of more mentally adventurous
nations. It is the mood of those who have made
their bargain with fate and are content to take
what it offers without re-opening the deal. It
leaves the mind free to concentrate undisturbed
upon profitable activities, because it is not dis-
tracted by a taste for unprofitable speculations.
Most generations, it might be said, walk in a path
, which they neither make, nor discover, but accept ;
the main thing is that they should march. The
blinkers worn by EngHshmen enable them to trot
-all the more steadily along the beaten road, with-
out being disturbed by curiosity as to their des-
tination.

2 THE ACQUISITIVE SOCIETY

But if the medicine of the constitution ought
not to be made its daily food, neither can its daily
food be made medicine. There are times which
are not ordinary, and in such times it is not enough
to follow the road. It is necessary to know where
it leads, and, if it leads nowhere, to follow another.
The search for another involves reflection, which
is uncongenial to the bustUng people who describe
themselves as practical, because they take things
as they are and leave them as they are. But the
practical thing for a traveller who is uncertain
of his path is not to proceed with the utmost
rapidity in the wrong direction : it is to consider
how to find the right one. - And the practical
thing for a nation which has stumbled upon one
of the turning points of history is not to behave
as though nothing very important were involved,
as if it did not matter whether it turned to the
right or to the left, went up hill or down dale,
provided that it continued doing with a little
more energy what it has done hitherto ; but to
consider whether what it has done hitherto is wise,
and, if it is not wise, to alter it.

When the broken ends of its industry, its
poHtics, its social organization, have to be pieced
together after a catastrophe, it must make a
decision ; for it makes a decision even if it refuses
to decide. If it is to make a decision which will
wear, it must travel beyond the philosophy moment-
arily in favour with the proprietors of its news-
papers. Unless it is to move with the energetic
futility of a squirrel in a revolving cage, it must
have a clear apprehension both of the deficiency
of what is, and of the character of what ought to be.

INTRODUCTORY 3

And to obtain this apprehension it must appeal
to some standard more stable than the momentary-
exigencies of its commerce or industry or social
life, and judge them by it. It must, in short,
have recourse to Principles.

Such considerations are, perhaps, not altogether
irrelevant at a time when facts have forced upon
Enghshmen the reconsideration of their social
institutions which no appeal to theory could in-
duce them to undertake. An appeal to principles
is the condition of any considerable reconstruction
of society, because social institutions are the
visible expression of the scale of moral values
which rules the minds of individuals, and it is
impossible to alter institutions without altering
that valuation. Parliament, industrial organiza-
tions, the whole complex machinery through which
society expresses itself, is a mill which grinds only
what is put into it. When nothing is put into it,
it grinds air.

There are many, of course, who desire no altera-
tion, and who, when it is attempted, will oppose
it. They have found the existing economic order
profitable in the past. They desire only such
changes as will insure that it is equally profitable
in the future. Quand le Roi avail bu^ la Pologne
etait ivre. They are genuinely unable to under-
stand why their countrymen cannot bask con-
tentedly by the fire which warms themselves, and
ask, like the French farmer-general : — " When
everything goes so happily, why trouble to change
it ? " Such persons are to be pitied, for they lack
the social quality which is proper to man. But

L

4 THE ACQUISITIVE SOCIETY

they do not need argument ; for Heaven has
denied them one of the faculties required to ap-
prehend it.

There are others, however, who are conscious of
the desire for a new social order, but who yet do
not grasp the implications of their own desire. Men
may genuinely sympathize with the demand for a
radical change. They may be conscious of social
evils and sincerely anxious to remove them. They
may set up a new department, and appoint new
officials, and invent a new name to express their
resolution to effect something more drastic than
reform, and less disturbing than revolution. But
unless they will take the pains, not only to act, but
to reflect, they end by effecting nothing. For
they deliver themselves bound to those who think
they are practical, because they take their philo-
sophy so much for granted as to be unconscious of
its implications. As soon as they try to act, that
philosophy re-asserts itself, and serves as an over-
ruling force which presses their action more
deeply into the old channels.

" Unhappy man that I am ; who shall deliver
me from the body of this death ? " When they
desire to place their economic life on a better founda-
tion, they repeat, like parrots, the word " Produc-
tivity," because that is the word that rises first
in their minds ; regardless of the fact that pro-
ductivity is the foundation on which it is based
already, that increased productivity is the one
characteristic achievement of the age before the
war, as religion was of the Middle Ages or art of
classical Athens, and that it is precisely in the century
which has seen the greatest increase in productivity

INTRODUCTORY 5

since the fall of the Roman Empire that economic
discontent has been most acute. When they are
touched by social compunction, they can think of
nothing more original than the diminution of
poverty, because poverty, being the opposite of
the riches which they value most, seems to them the
most terrible of human afflictions. They do not
understand that poverty is a symptom and a con-
sequence of social disorder, while the disorder itself
is something at once more fundamental and more
incorrigible, and that the quality in their social
life which causes it to demoralize a few by excessive
riches, is also the quality which causes it to de-
moralize many by excessive poverty.

" But increased production is important." Of
course it is ! That plenty is good and scarcity evil
— it needs no ghost from the graves of the past seven
years to tell us that. But plenty depends upon co-
operative effort, and co-operation upon moral
principles. And moral principles are what the
prophets of this dispensation despise. So the
world " continues in scarcity," because it is too
grasping and too short-sighted to seek that " which
maketh men to be of one mind in a house." The
well-intentioned schemes for social reorganization
put forward by its commercial teachers are abortive,
because they endeavour to combine incompatibles,
and, if they disturb everything, they settle nothing.
They are like a man who, when he finds that his
shoddy boots wear badly, orders a pair two sizes
larger instead of a pair of good leather, or who makes
up for putting a bad sixpence in the plate one
Sunday by putting in a bad shilling next. And
when their fit of feverish energy has spent itself,

6 THE ACQUISITIVE SOCIETY

and there is nothing to show for it except dis-
illusionment, they cry that reform is impracticable,
and blame human nature, when what they ought to
blame is themselves.

Yet all the time the principles upon which in-
dustry should be based are simple, however difficult
it may be to apply them ; and if they are over-
looked it is not because they are difficult, but be-
cause they are elementary. They are simple
because industry is simple. An industry, when all
is said, is, in its essence, nothing more mysterious
than a body of men associated, in various degrees
of competition and co-operation, to win their liveli-
hood by providing the community with some service
which it requires. Organize it as you will, let it be
a group of craftsmen labouring with hammer and
chisel, or peasants ploughing their own fields, or
armies of mechanics of a hundred different trades
constructing ships which are miracles of complexity
with machines which are the cHmax of centuries of
invention, its function is service, its method is
association. Because its function is service, an
industry as a whole has rights and duties towards
the community, the abrogation of which involves
privilege. Because its method is association, the
different parties within it have rights and duties
towards each other ; and the neglect or perversion
of these involves oppression.

The conditions of a right organization of industry
are, therefore, permanent, unchanging, and capable
of being apprehended by the most elementary
intelligence, provided it will read the nature of
its countrymen in the large outHnes of history, not
in the bloodless abstractions of experts. And they

INTRODUCTORY 7

are the same, in all essentials, for a society
which is poor as for a society which is rich. The
latter may afford luxuries which the former must
forego ; the former may labour hard on a stony
soil while the latter dwells at ease in its material
Zion. These differences of economic endowment
decide what industry will yield ; they do not alter
the ends at which it should aim, or the moral stand-
ard by which its organization should be tried.
As long as men are men, a poor society cannot be
too poor to find a right order of life, nor a rich
society too rich to have need to seek it. And if
the economists are correct, as they may be, in
warning us that the amazing outburst of riches
which took place in the nineteenth century is an
episode which is over ; if the period of increasing
returns has ended and the period of diminishing
returns has begun ; if in the future it will be only
by an increased effort that the industrial civiliza-
tion of Western Europe can purchase from America
and the tropics the foodstuffs and raw materials
which it requires, then it is all the more necessary
that the principles on which its economic order
is founded should justify themselves to the con-
sciences of decent men.

The first principle is that industry should be sub-
ordinated to the community in such a way as to
render the best service technically possible, that
those who render that service faithfully should be
honourably paid, and that those who render no ser-
vice should not be paid at all, because it is of the
essence of a function that it should find its meaning
in the satisfaction, not of itself, but of the end which
it serves. The second is that its direction and govern-

8 THE ACQUISITIVE SOCIETY

ment should be in the hands of persons who are
responsible to those who are directed and governed,
because it is the condition of economic freedom
that men should not be ruled by an authority
which they cannot control. The industrial prob-
lem, in fact, is a problem of right, not merely of
material misery, and because it is a problem of
right it is most acute among those sections of the
working classes whose material misery is least.
It is a question, first of Function, and secondly
of Freedom.

II

RIGHTS AND FUNCTIONS

A function may be defined as an activity which
embodies and expresses the idea of social purpose.
The essence of it is that the agent does not perform
it merely for personal gain or to gratify himself,
but recognizes that he is responsible for its dis-
charge to some higher authority. The purpose
of industry is obvious. It is to supply man with
things which are necessary, useful, or beautiful,
and thus to bring life to body or spirit. In so far
as it is governed by this end, it is among the most
important of human activities. In so far as it is
diverted from it, it may be harmless, amusing, or
even exhilarating to those who carry it on ; but it
possesses no more social significance than the
orderly business of ants and bees, the strutting of
peacocks, or the struggles of carnivorous animals
over carrion.

Men have normally appreciated this fact, how-
ever unwilling or unable they may have been to
act upon it ; and therefore from time to time, in so
far as they have been able to control the forces of
violence and greed, they have adopted various
expedients for emphasizing the social quality of
economic activity. It is not easy, however, to
emphasize it effectively, because to do so requires
a constant effort of will, against which egotistical
instincts are in rebeUion, and because, if that will

lo THE ACQUISITIVE SOCIETY

is to prevail, it must be embodied in some social
and political organization, which may itself be-
come so arbitrary, tyrannical and corrupt as to
thwart the performance of function instead of
promoting it. When this process of degeneration
has gone far, as in most European countries it had
by the middle of the eighteenth century, the in-
dispensable thing is to break the dead organiza-
tion up and to clear the ground. In the course of
doing so, the individual is emancipated and his
rights are enlarged ; but the idea of social purpose
is discredited by the discredit justly attaching to
the obsolete order in which it is embodied.

It is not surprising, therefore, that in the new
industrial societies which arose on the ruins of the
old regime the dominant note should have been
the insistence upon individual rights, irrespective
of any social purpose to which their exercise con-
tributed. The economic expansion which con-
centrated population on the coal-measures was, in
essence, an immense movement of colonization
drifting from the south and east to the north and
west ; and it was natural that in those regions of
England, as in the American settlements, the
characteristic philosophy should be that of the
pioneer and the mining camp. The change of
social quality was profound. But in England, at
least, it was gradual, and the " industrial revolu-
tion," though catastrophic in its effects, was only
the visible climax of generations of subtle moral
change.

The rise of modern economic relations, which may
be dated in England from the latter half of the
seventeenth century, was coincident with the

RIGHTS AND FUNCTIONS ii

growth of a political theory which replaced the
conception of purpose by that of mechanism.
During a great part of history men had found the
significance of their social order in its relation to
the universal purposes of religion. It stood as
one rung in a ladder which stretched from hell to
Paradise, and the classes who composed it were
the hands, the feet, the head of a corporate body
which was itself a microcosm imperfectly reflect-
ing a larger universe. When the Reformation
made the Church a department of the secular
government, it undermined the already enfeebled
spiritual forces which had erected that sublime,
if too much elaborated, synthesis. But /ts
influence remained for nearly a century after the
roots which fed it had been severed. It was the
atmosphere into which men were born, and from
which, however practical, or even Machiavellian,
they could not easily disengage their spirits.

Nor was it inconvenient for the new statecraft
to see the weight of a traditional religious sanction
added to its own concern in the subordination of
all classes and interests to the common end, of
which it conceived itself, and during the greater
part of the sixteenth century was commonly con-
ceived, to be the guardian. The lines of the
social structure were no longer supposed to reproduce
in miniature the plan of a universal order. But
common habits, common traditions and beliefs,
common pressure from above gave them a unity
of direction, which restrained the forces of individual
variation and lateral expansion ; and the centre
towards which they converged, formerly a Church
possessing some of the characteristics of a State,

12 THE ACQUISITIVE SOCIETY

was now a State that had clothed itself with many
of the attributes of a Church.

The difference between the England of Shakes-
peare, still visited by the ghosts of the Middle Ages,
and the England which emerged in 1700 from the
fierce polemics of the last two generations, was a
difference of social and political theory even more
than of constitutional and political arrangements.
Not only the facts, but the minds which appraised
them, were profoundly modified. The essence of
the change was the disappearance of the idea that
social institutions and economic activities were
related to common ends, which gave them their
significance and which served as their criterion.

In the eighteenth century both the State and the
Church had abdicated that part of their sphere which
had consisted in the maintenance of a common body
of social ethics ; what was left of it was the repression
of a class, not the discipline of a nation. Opinion
ceased to regard social institutions and economic
activity as amenable, like personal conduct, to
moral criteria, because it was no longer influenced
by the spectacle of institutions which, arbitrary,
capricious, and often corrupt in their practical
operation, had been the outward symbol and ex-
pression of the subordination of life to purposes
transcending private interests. That part of
government which had been concerned with social
administration, if it did not end, became at least
obsolescent. For such democracy as had existed
in the Middle Ages was dead, and the democracy
of the Revolution was not yet born, so that govern-
ment passed into the lethargic hand of classes who

RIGHTS AND FUNCTIONS 13

wielded the power of the State in the interests of
an irresponsible aristocracy.

And the Church was even more remote from the
daily life of mankind than the state. Philanthropy
abounded ; but religion, once the greatest social
force, had become a thing as private and individual
as the estate of the squire or the working clothes
of the labourer. There were special dispensations
and occasional interventions, like the acts of a
monarch who reprieved a criminal or signed an
order for his execution. But what was familiar,
and human, and lovable — what was Christian in
Christianity had largely disappeared. God had
been thrust into the frigid altitudes of infinite
space. There was a limited monarchy in Heaven,
as well as upon earth. Providence was the spec-
tator of the curious machine which it had con-
structed and set in motion, but the operation of
which it was neither able nor willing to control.
Like the occasional intervention of the Crown in
the proceedings of ParHament, its wisdom was
revealed in the infrequency of its interference.

The natural consequence of the abdication of
authorities which had stood, however imperfectly,
for a common purpose in social organization, was
the gradual disappearance from social thought of
the idea of purpose itself. Its place in the eigh-
teenth century was taken by the idea of mechanism.
The conception of men as united to each other, and
of all mankind as united to God, by mutual obliga-
tions arising from their relation to a common end,
ceased to be impressed upon men's minds, when
Church and State withdrew from the centre of
social life to its circumference. Vaguely conceived

I

14 THE ACQUISITIVE SOCIETY

and imperfectly realized, it had been the keystone
holding together the social fabric. What remained
when the keystone of the arch was removed, was
private rights and private interests, the materials
of a society rather than a society itself. These
rights and interests were the natural order which
had been distorted by the ambitions of kings and
priests, and which emerged when the artificial
super-structure disappeared, because they were
the creation, not of man, but of Nature herself.
They had been regarded in the past as relative to
some public purpose, whether religion or national
welfare. Henceforward they were thought to be
absolute and indefeasible, and to stand by their
own virtue. They were the ultimate political and
social reality ; and since they were the ultimate
reality, they were not subordinate to other aspects
of society, but other aspects of society were sub-
ordinate to them.

The State could not encroach upon these rights,
for the State existed for their maintenance. They
determined the relation of classes, for the most
obvious and fundamental of all rights was property
— property absolute and unconditioned — and
those who possessed it were regarded as the natural
governors of those who did not. Society arose
from their exercise, through the contracts of
individual with individual. It fulfilled its object in
so far as, by maintaining contractual freedom, it
secured full scope for their unfettered enjoyment.
It failed in so far as, like the French monarchy, it
over-rode them by the use of an arbitrary authority.
Thus conceived, society assumed something of the
appearance of a great joint-stock company, in

RIGHTS AND FUNCTIONS 15

which political power and the receipt of dividends
were justly assigned to those who held the most
numerous shares. The currents of social activity-
did not converge upon common ends, but were
dispersed through a multitude of channels, created
by the private interests of the individuals who
composed society. But in their very variety and
spontaneity, in the very absence of any attempt
to relate them to a larger purpose than that of
the individual, lay the best security of its attain-
ment. There is a mysticism of reason as well as
of emotion, and the eighteenth century found
in the beneficence of natural instincts a substitute
for the God whom it had expelled from contact
with society, and did not hesitate to identify them.

" Thus God and nature planned the general frame
And bade self-love and social be the same."

The result of such ideas in the world of practice
was a society which was ruled by law, not by the
caprice of Governments, but which recognized no
moral limitations on the pursuit by individuals of
their economic self-interest. In the world of
thought, it was a political philosophy which made
rights the foundation of the social order, and which
considered the discharge of obligations, when it
considered it at all, as emerging by an inevitable
process from their free exercise. The first famous
exponent of this philosophy was Locke, in whom
the dominant conception is the indefeasibiHty of
private rights, not the pre-ordained harmony be-
tween private rights and public welfare. In the
great French writers who prepared the way for the
Revolution, while believing that they were the

i6 THE ACQUISITIVE SOCIETY

servants of an enlightened absolutism, there is an
almost equal emphasis upon the sanctity of rights
and upon the infallibility of the alchemy by which
the pursuit of private ends is transmuted into
the attainment of public good. Though their
writings reveal the influence of the conception of
society as a self-adjusting mechanism, which after-
wards became the most characteristic note of
English individualism, what the French Revolu-
tion burned into the mind of Europe was the former
not the latter. In England the idea of right had
been negative and defensive, a barrier to the en-
croachment of Governments. The French leapt
to the attack from trenches which the English had
been content to defend, and in France the idea
became affirmative and militant, not a weapon of
defence, but a principle of social organization. The
attempt to refound society upon rights, and rights
springing not from musty charters, but from the
very nature of man himself, was at once the triumph
and the limitation of the Revolution. It gave it
the enthusiasm and infectious power of religion.
What happened in England might seem at first
sight to have been precisely the reverse. English
practical men, whose thoughts were pitched in a
lower key, were a little shocked by the pomp and
brilliance of that tremendous creed. They had
scanty sympathy with the absolute affirmations of
France. What captured their imagination was
not the right to liberty, which made no appeal to
their commercial instincts, but the expediency of
liberty, which did ; and, when the Revolution had
revealed the explosive power of the idea of natural
right, they sought some less menacing formula. It

RIGHTS AND FUNCTIONS 17

had been offered them first by Adam Smith and
his precursors, who showed how the mechanism
of economic Hfe converted " as with an invisible
hand," the exercise of individual rights into the
instrument of public good. Bentham, who des-
pised metaphysical subtleties, and thought the
Declaration of the Rights of Man as absurd as any
other dogmatic religion, completed the new orien-
tation by supplying the final criterion of political
institutions in the principle of Utility. Hence-
forward emphasis was transferred from right of
the individual to exercise his freedom as he pleased
to the expediency of an undisturbed exercise of
freedom to society.

The change is significant. It is the difference
between the universal and equal citizenship of
France, with its five million peasant proprietors,
and the organized inequaHty of England estabHshed
solidly upon class traditions and class institutions ;
the descent from hope to resignation, from the fire
and passion of an age of illimitable vistas to the
monotonous beat of the factory engine, from Turgot
and Condorcet to the melancholy mathematical
creed of Bentham and Ricardo and James Mill.
Mankind has, at least, this superiority over its
philosophers, that great movements spring from
the heart and embody a faith, not the nice adjust-
ments of the hedonistic calculus. So, in the name
of the rights of property, France abolished in three
years a great mass of property rights, which, under
the old regime, had robbed the peasant of part of
the produce of his labour, and the social transfor-
mation survived a whole world of political
changes.

1 8 THE ACQUISITIVE SOCIETY

In England the glad tidings of democracy were
broken too discreetly to reach the ears of the hind
in the furrow or the shepherd on the hill ; there
were political changes without a social transfor-
mation. The doctrine of Utility, though trenchant
in the sphere of politics, involved no considerable
interference with the fundamentals of the social
fabric. Its exponents were principally concerned
with the removal of political abuses and legal
anomahes. They attacked sinecures and pensions
and the criminal code and the procedure of the
law courts. But they touched only the surface
of social institutions. They thought it a monstrous
injustice that the citizen should pay one-tenth
of his income in taxation to an idle Government,
but quite reasonable that he should pay one-fifth
of it in rent to an idle landlord.

The difference, nevertheless, was one of emphasis
and expression, not of principle. It mattered very
little in practice whether private property and un-
fettered economic freedom were stated, as in France,
to be natural rights, or whether, as in England,
they were merely assumed once for all to be ex-
pedient. In either case they were taken for granted
as the fundamentals upon which social organization
was to be based, and about which no further
argument was admissible. Though Bentham
argued that rights were derived from utility, not
from nature, he did not push his analysis so far as
to argue that any particular right was relative to
any particular function, and thus endorsed indis-
criminately rights which were not accompanied by
service as well as rights which were. While es-
chewing, in short, the phraseology of natural rights,

RIGHTS AND FUNCTIONS 19

the English UtiHtarians retained something not
unhke the substance of them. For they assumed
that private property in land, and the private
ownership of capital, were natural institutions,
and gave them, indeed, a new lease of life, by
proving to their own satisfaction that social well-
being must result from their continued exercise.
Their negative was as important as their positive
teaching. It was a conductor which diverted the
lightning. Behind their political theory, behind
the practical conduct, which as always, continues
to express theory long after it has been discredited
in the world of thought, lay the acceptance of
absolute rights to property and to economic free-
dom as the unquestioned centre of social organiza-
tion.

The result of that attitude was momentous. The
motive and inspiration of the Liberal Movement
of the eighteenth century had been the attack on
Privilege ; and, when its main ideas were being
hammered out, that attack was the one supremely
necessary thing. In the modern revulsion against
economic tyranny, there is a disposition to re-
present the writers who stand on the threshold
of the age of capitalist industry as the prophets
of a vulgar materialism, which would sacrifice every
human aspiration to the pursuit of riches. No
interpretation could be more misleading ; and, if
it is not unnatural in England, applied to France,
where the new faith grew to its fullest stature, it is
fantastic. The great individualists of the eight-
eenth century, Jefferson and Turgot and Condorcet
and Adam Smith, shot their arrows against the
abuses of their day, not of ours. It is as absurd

I

20 THE ACQUISITIVE SOCIETY

to criticise them as indifferent to the evils of a social
order which they could not anticipate, as to appeal
to their authority in defence of it.

When they formulated the new philosophy, the
obvious abuse was not the power wielded by the
owners of capital over populations unable to work
without their permission ; it was the network of
customary and legal restrictions by which the land-
owner in France, monopoHstic corporations and the
State both in France and in England, prevented the
individual from exercising his powers, divorced pro-
perty from labour, and made idleness the pensioner
of industry. The grand enemy of the age was
monopoly ; the battlecry with which enlighten-
ment marched against it was the abolition of
privilege ; its ideal was a society where each man
had free access to the economic opportunities
which he could use and enjoyed the wealth which
by his efforts he had created. That school of
thought represented all, or nearly all, that was
humane and intelligent in the mind of the age. It
was individualistic, not because it valued riches
as the main end of man, but because it had a high
sense of human dignity, and desired that men
should be free to become themselves. And the
vulgar commercialism which in England resisted,
and still resists, the abolition of child labour,
derived half its strength from the fact that the
philosophy behind which it sheltered was that, not
of reaction, but of enlightenment.

Of enlightenment, yes. But of an enlightenment
which had crystallized its doctrines while the new
industrial order was still young and its effects
unknown. When Adam Smith wrote, the factory

RIGHTS AND FUNCTIONS 21

system was still in its infancy ; the typical employer
was a small master but little removed from the
half dozen journeymen whom he employed ; and
the modern economic system, with its centralized
control over armies of wage-earners, its joint-stock
companies separating ownership from manage-
ment, its combinations controlling a whole industry,
was neither seen nor suspected. Few even now
can read Condorcet's Tableau Historique without
a lifting of the heart. But the creed which had
exorcised the spectre of agrarian feudalism haunt-
ing village and chateau in France was impotent to
disarm the new ogre of industrial capitalism who was
stretching his grimy arms in the north of England,
for it had never conceived the possibility of his
existence. Hence, with all its brilliant achieve-
ments, the appearance of something belated,
something inapposite and irrelevant which dogs
the exponents of that school of thought when they
discuss economic issues after the middle of the nine-
teenth century, so different from its trenchant and
unswerving directness in the age of its birth. It is
eloquent and humane. But it seems to repeat the
phrases of an age which expired in producing them,
and to do so without knowing it. For since they
were minted by the great masters, the deluge
has changed the face of economic society and
has made them phrases and little more.

When, shorn of its splendours and illusions,
liberalism triumphed in England in 1832, it carried
without criticism into the new world of capitalist
industry categories of private property and freedom
of contract which had been forged in the simpler
economic environment of the pre-industrial era»

22 THE ACQUISITIVE SOCIETY

In England these categories are being bent and
twisted till they are no longer recognizable, and
will, in time, be made harmless. In America,
where necessity compelled the crystallization of
principles in a constitution, they have the rigidity
of an iron jacket. The magnificent formulae in
which a society of farmers, merchants and master
craftsmen enshrined its philosophy of freedom are
in danger of becoming fetters used by an Anglo-Saxon
business aristocracy to bind insurgent movements
on the part of an immigrant and semi-servile
proletariat.

Ill

THE ACQUISITIVE SOCIETY

This doctrine has been qualified in practice by
particular limitations to avert particular evils and
to meet exceptional emergencies. But it is limited
in special cases precisely because its general validity
is regarded as beyond controversy, and, up to the
eve of the recent war, it was the working faith of
modern economic civilization. What it implies is,
that the foundation of society is found, not in
functions, but in rights ; that rights are not de-
ducible from the discharge of functions, so that the
acquisition of wealth and the enjoyment of property
are contingent upon the performances of services,
but that the individual enters the world equipped
with rights to the free disposal of his property and
the pursuit of his economic self-interest, and that
these rights are anterior to, and independent of,
any service which he may render.

True, the service of society will, in fact, it is
assumed, result from their exercise. But it is not
the primary motive and criterion of industry, but
a secondary consequence, which emerges inciden-
tally through the exercise of rights, a consequence
which is attained, indeed, in practice, but which
is attained without being sought. It is not the end
at which economic activity aims, or the standard
by which it is judged, but a by-product, as coal-
tar is a by-product of the manufacture of gas ;

23

24 THE ACQUISITIVE SOCIETY

whether that by-product appears or not, it is not
proposed that the rights themselves should be
abdicated. For they are regarded, not as a con-
ditional trust, but as a property, which may,
indeed, give way to the special exigencies of extra-
ordinary emergencies, but which resumes its sway
when the emergency is over, and in normal times
is above discussion.

That conception is written large over the history
of the nineteenth century, both in England and in
America. The doctrine which it inherited was that
property was held by an absolute right on an in-
dividual basis, and to this fundamental it added an-
other, which can be traced in principal far back
into history, but which grew to its full stature only
after the rise of capitalist industry, that societies
act both unfairly and unwisely when they limit
opportunities of economic enterprise. Hence
every attempt to impose obligations as a condition
of the tenure of property or of the exercise of eco-
nomic activity has been met by uncompromising
resistance.

The story of the struggle between humanitarian
sentiment and the theory of property transmitted
from the eighteenth century is familiar. No one
has forgotten the opposition offered in the name of
the rights of property to factory legislation, to
housing reform, to interference with the adultera-
tion of goods, even to the compulsory sanitation
of private houses. *' May I not do what I like
with my own ? " was the answer to the proposal
to require a minimum standard of safety and sani-
tation from the owners of mills and houses. Even
to this day, while an English urban landlord can

THE ACQUISITIVE SOCIETY 25

cramp or distort the development of a whole city
by withholding land except at fancy prices, Eng-
lish municipalities are without adequate powers of
compulsory purchase, and must either pay through
the nose or see thousands of their members over-
crowded. The whole body of procedure by which
they may acquire land, or indeed new powers
of any kind, has been carefully designed by lawyers
to protect owners of property against the possibility
that their private rights may be subordinated to
the public interest, because their rights are thought
to be primary and absolute and public interests
secondary and contingent.

No one needs to be reminded, again, of the
influence of the same doctrine in the sphere of
taxation. The income tax was excused as a
temporary measure, because the normal society
was conceived to be one in which the individual
spent his whole income for himself and owed no
obligations to society on account of it. The death
duties were denounced as robbery, because they
implied that the right to benefit by inheritance
was conditional upon a social sanction. The Bud-
get of 1909 created a storm, not because the taxation
of land was heavy — in amount the land-taxes
were trifHng — but because it was felt to involve
the doctrine that property is not an absolute right,
but that it may properly be accompanied by special
obligations, a doctrine which, if carried to its
logical conclusion, would destroy its sanctity by
making ownership no longer absolute but condi-
tional.

Such an implication seems intolerable to an
influential body of public opinion, because it has

26 THE ACQUISITIVE SOCIETY

been accustomed to regard the free disposal of
property, and the unlimited exploitation of economic
opportunities, as rights which are absolute and
unconditioned. On the whole, until recently, this
opinion had few antagonists who could not be
ignored. As a consequence the maintenance of
property rights has not been seriously threatened
even in those cases in which it is evident that no
service is discharged, directly or indirectly, by their
exercise.

No one supposes, that the owner of urban land,
performs qua owner, any function. He has a
right of private taxation ; that is all. But the
private ownership of urban land is as secure to-day
as it was a century ago ; and Lord Hugh Cecil,
in his interesting little book on Conservatism, de-
clares that, whether private property is mischievous
or not, society cannot interfere with it, because to
interfere with it is theft, and theft is wicked. *
No one supposes that it is for the public good that
large areas of land should be used for parks and
game. But our country gentlemen are still settled
heavily upon their villages and still slay their
thousands. No one can argue that a monopohst
is impelled by " an invisible hand " to serve the
public interest. But, over a considerable field of
industry, competition, as the recent Report on
Trusts shows, has been replaced by combination,
and combinations are allowed the same unfettered
freedom as individuals in the exploitation of

*Conservatism, by Lord Hugh Cecil. Chap. V. " The simple
consideration that it is wrong to inflict an injury upon any man,
sufi&ces to constitute a right of private property where such property

already exists All property appears to have an equal

claim on the respect of the State."

THE ACQUISITIVE SOCIETY 27

economic opportunities. No one reaUy believes
that the production of coal depends upon the pay-
ment of mining royalties or that ships will not go
to and fro unless ship-owners can earn fifty per cent,
upon their capital. But coal mines, or rather the
coal miner, still pay royalties, and ship-owners still
make fortunes and are made Peers.

At the very moment when everybody is talking
about the importance of increasing the output of
wealth, the last question, apparently, which it
occurs to any statesman to ask is why wealth
should be squandered on futile activities, and in ex-
penditure which is either disproportionate to
service or made for no service at all. So inveterate,
indeed, has become the practice of payment in
virtue of property rights, without even the pretence
of any service being rendered, that when, in a
national emergency, it is proposed to extract oil
from the ground, the Government actually pro-
poses that every gallon shall pay a tax to land-
owners who never even suspected its existence, and
the ingenuous proprietors are full of pained astonish-
m.ent at any one questioning whether the nation is
under a moral obligation to endow them further.
Such rights are, strictly speaking, privileges. For
the definition of a privilege is a right to which
no corresponding function is attached.

The enjoyment of property and the direction of
industry are considered, in short, to require no
social justification, because they are regarded as
rights which stand by their own virtue, not func-
tions to be judged by the success with which they
contribute to a social purpose. To-day that
doctrine, if intellectually discredited, is still the

28 THE ACQUISITIVE SOCIETY

practical foundation of social organization. How
slowly it yields even to the most insistent demon-
stration of its inadequacy is shown by the attitude
which the heads of the business world have adopted
to the restrictions imposed on economic activity
during the war. The control of railways, mines,
and shipping, the distribution of raw materials
through a public department instead of through
competing merchants, the regulation of prices, the
attempts to check " profiteering " — the detailed
application of these measures may have been
effective or ineffective, wise or injudicious.
It is evident, indeed, that some of them have
been foolish, like the restriction of imports
when the world has five years' destruction
to repair, and that others, if sound in
conception, have been questionable in their ex-
ecution. If they were attacked on the ground that
they obstruct the efficient performance of function
— if the leaders of industry came forward and said
generally, as some, to their honour, have : — " We
accept your policy, but we will improve its execu-
tion ; we desire payment for service and service
only and will help the state to see that it pays for
nothing else " — there might be controversy as to
the facts, but there could be none as to the principle.
In reality, however, the gravamen of the charges
brought against these restrictions appears generally
to be precisely the opposite. They are denounced
by most of their critics not because they limit the
opportunity of service, but because they diminish
the opportunity for gain, not because they prevent
the trader enriching the community, but because
thev make it more difficult for him to enrich him-

THE ACQUISITIVE SOCIETY 29

self ; not, in short, because they have failed to
convert economic activity into a social function, but
because they have come too near succeeding. If
the financial adviser to the Coal Controller may be
trusted, the shareholders in coal mines would ap-
pear to have done fairly well during the war. But
the proposal to limit their profits to is. 2d. per ton is
described by Lord Gainford as " sheer robbery and
confiscation." With some honourable exceptions,
what is demanded is that in future as in the past the
directors of industry should be free to handle it as
an enterprise conducted for their own convenience
or advancement, instead of being compelled, as they
have been partially compelled during the war, to
subordinate it to a social purpose.

The demand was to be expected. For to
admit that the criterion of commerce and
industry is its success in discharging a social pur-
pose is at once to turn property and economic
activity from rights which are absolute into rights
which are contingent and derivative, because it is
to afhrm that they are relative to functions and
that they may justly be revoked when the functions
are not performed. It is, in short, to imply that
property and economic activity exist to promote
the ends of society, whereas hitherto society has
been regarded in the world of business as existing
to promote them. To those who hold their position,
not as functionaries, but by virtue of their success
in making industry contribute to their own wealth
and social influence, such a reversal of means and
ends appears little less than a revolution. For it
implies that they must justify before a social tri-
bunal rights which they have hitherto taken for

30 THE ACQUISITIVE SOCIETY

granted as part of an order which is above criticism.

During the greater part of the nineteenth century
the significance of the opposition between the two
principles of individual rights and social functions
was masked by the doctrine of the inevitable
harmony between private interests and public good.
Competition, it was argued, was an effective sub-
stitute for honesty. To-day that subsidary doctrine
has fallen to pieces under criticism ; few now would
profess adherence to the compound of economic
optimism and moral bankruptcy which led a nine-
teenth century economist to say : " Greed is held
in check by greed, and the desire for gain sets
limits to itself." The disposition to regard in-
dividual rights as the centre and pivot of society
is still, however, the most powerful element in
political thought and the practical foundation of
industrial organization. The laborious refutation
of the doctrine that private and public interests
are co-incident, and that man's self-love is God's
Providence, which was the excuse of the last
century for its worship of economic egotism, has
achieved, in fact, surprisingly small results. Econ-
omic egotism is still worshipped ; and it is wor-
shipped because that doctrine was not really the
centre of the position. It was an outwork, not the
citadel, and now that the outwork has been cap-
tured, the citadel is still to win.

What gives its special quality and character, its
toughness and cohesion, to the industrial system
built up in the last century and a half, is not its
exploded theory of economic harmonies. It is the
doctrine that economic rights are anterior to, and
independent of, economic functions, that they stand

THE ACQUISITIVE SOCIETY 31

by their own virtue, and need adduce no higher
credentials. The practical result of it is that
economic rights remain, whether economic func-
tions are performed or not. They remain to-day
in a more menacing form than in the age of early
industrialism. For those who control industry no
longer compete but combine, and the rivalry be-
tween property in capital and property in land has
long since ended.

The basis of the New Conservatism appears to
be a determination so to organize society, both by
political and economic action, as to make it secure
against every attempt to extinguish payments
which are made, not for service, but because the
owners possess a right to extract income without it.
Hence the fusion of the two traditional parties, the
proposed " strengthening " of the second chamber,
the return to protection, the swift conversion of
rival industrialists to the advantages of monopoly,
and the attempts to buy off with concessions the
more influential section of the working classes.
Revolutions, as a long and bitter experience re-
veals, are apt to take their colour from the regime
which they overthrow. Is it any wonder that the
creed which affirms the absolute rights of property
should sometimes be met with a counter-affirma-
tion of the absolute rights of labour, less anti-
social, indeed, and inhuman, but almost as dog-
matic, almost as intolerant and thoughtless as
itself ?

A society which aimed at making the acquisition
of wealtK contingent upon the discharge of social
obHgations, which sought to proportion remunera-
tion to service and denied it to those by whom no

32 THE ACQUISITIVE SOCIETY

service was performed, which inquired first, not
what men possess, but what they can make or
create or achieve, might be called a Functional
Society, because in such a society the main subject
of sociar emphasis would be the performance of
functions. But such a society does not exist, even
as a remote ideal, in the modern world, though
something like it has hung, an unrealized theory,
before men's minds in the past. Modern societies
aim at protecting economic rights, while leaving
economic functions, except in moments of abnormal
emergency, to fulfil themselves.

The motive which gives colour and quality to
their public institutions, to their poHcy and political
thought, is not the attempt to secure the fulfilment
of tasks undertaken for the public service, but to
increase the opportunities open to individuals of
attaining the objects which they conceive to be
advantageous to themselves. If asked the end or
criterion of social organization, they would give an
answer reminiscent of the formula the greatest
happiness of the greatest number. But to say that
the end of social institutions is happiness, is to say
that they have no common end at aU. For happiness
is individual, and to make happiness the object of
society is to resolve society itself into the ambitions
of numberless individuals, each directed towards
the attainment of some personal purpose.

Such societies may be called Acquisitive Societies,
because their whole tendency and interest and pre-
occupation is to promote the acquisition cf wealth.
The appeal of this conception must be powerful,
for it has laid the whole modern world ander its
spell. Since England first revealed the possibilities

THE ACQUISITIVE SOCIETY 33

of industrialism, it has gone from strength to
strength, and as industrial civilization invades
countries hitherto remote from it, as Russia and
Japan and India and China are drawn into its
orbit, each decade sees a fresh extension of its
influence. The secret of its triumph is obvious.
It is an invitation to men to use the powers with
which they have been endowed by nature or
society, by skill or energy or relentless egotism or
mere good fortune, without enquiring whether
there is any principle by which their exercise
should be limited. It assumes the social organiza-
tion which determines the opportunities which
different classes shall in fact possess, and concen-
trates attention upon the right of those who possess
or can acquire power to make the fullest use of it
for their own self-advancement. By fixing men's
minds, not upon the discharge of social obligations,
which restricts their energy, because it defines the
goal to which it should be directed, but upon the
exercise of the right to pursue their own self-interest,
it offers unlimited scope for the acquisition of
riches, and therefore gives free play to one of the
most powerful of human instincts.

To the strong it promises unfettered freedom for
the .exercise of their strength ; to the weak the hope
that they too one day may be strong. Before the
eyes of both it suspends a golden prize, which not
all can attain, but for which each may strive, the
enchanting vision of infinite expansion. It
assures men that there are no ends other than
their ends, no law other than their desires, no
Hmit other than that which they think advisable.
Thus it makes the individual the centre of his own

34 THE ACQUISITIVE SOCIETY

universe, and dissolves moral principles into a choice
of expediencies. And it immensely simplifies the
problems of social life in complex communities.
For it relieves them of the necessity of discriminat-
ing between different types of economic activity and
different sources of wealth, between enterprise and
avarice, energy and unscrupulous greed, property
which is legitimate and property which is theft, the
just enjoyment of the fruits of labour and the idle
parasitism of birth or fortune, because it treats all
economic activities as standing upon the same level,
and suggests that excess or defect, waste or super-
fluity, require no conscious effort of the social will
to avert them, but are corrected almost automati-
cally by the mechanical play of economic forces.

Under the impulse of such ideas men do not be-
come religious or wise or artistic ; for rehgion and
wisdom and art imply the acceptance of limitations.
But they become powerful and rich. They inherit
the earth and change the face of nature, if they do
not possess their own souls ; and they have that
appearance of freedom which consists in the absence
of obstacles between opportunities for self-advance-
ment and those whom birth, or wealth, or talent
or good fortune have placed in a position to seize
them. It is not difficult either for individuals or
for societies to achieve their object, if that object
be sufficiently limited and immediate, and if they
are not distracted from its pursuit by other con-
siderations. The temper which dedicates itself to
the cultivation of opportunities, and leaves ob-
ligations to take care of themselves, is set upon an
object which is at once simple and practicable. The
eighteenth century defined it. The twentieth

THE ACQUISITIVE SOCIETY 35

century has very largely attained it. Or, if it has
not attained it, it has at least grasped the possibili-
ties of its attainment. The national output of
wealth per head of population is estimated to have
been approximately ^^40 in 1914. Unless man-
kind chooses to continue the sacrifice of prosperity
to the ambitions and terrors of nationalism, it is
possible that by the year 20CX) it may be doubled.

IV

THE NEMESIS OF INDUSTRIALISM

Such happiness is not remote from achievement.
In the course of achieving it, however, the world
has been confronted by a group of unexpected
consequences, which are the cause of its malaise,
as the obstruction of economic opportunity was
the cause of social malaise in the eighteenth century.
And these consequences are not, as is often sugges-
ted, accidental mal-adjustments, but flow naturally
from its dominant principle : so that there is a
sense in which the cause of its perplexity is not its
failure, but the quality of its success, and its light
itself a kind of darkness.

The will to economic power, if it is sufficiently
single-minded, brings riches. But if it is single-
minded it destroys the moral restraints which
ought to condition the pursuit of riches, and there-
fore also makes the pursuit of riches meaningless.
For what gives meaning to economic activity, as
to any other activity, is, as we have said, the pur-
pose to which it is directed. But the faith upon
which our economic civilization reposes, the faith
that riches are not a means but an end, implies
that all economic activity is equally estimable,
whether it is subordinated to a social purpose or
not. Hence it divorces gain from service, and
justifies rewards for which no function is performed,
or which are out of all proportion to it. Wealth in

36

THE NEMESIS OF INDUSTRIALISM 37

modern societies is distributed according to oppor-
tunity ; and while opportunity depends partly
upon talent and energy, it depends still more upon
birth, social position, access to education and in-
herited wealth ; in a word upon property. For
talent and energy can create opportunity. But
property need only wait for it. It is the sleeping
partner who draws part of the dividends which the
firm produces, the residuary legatee who always
claims his share in the estate.

Because rewards are divorced from services, so
that what is prized most is not riches obtained in
return for labour but riches the economic origin of
which, being regarded as sordid, is concealed, two
results follow. The first is the creation of a class
of pensioners upon industry, who levy toll upon
its product, but contribute nothing to its increase,
and who are not merely tolerated, but applauded
and admired and protected with assiduous care, as
though the secret of prosperity resided in them.
They are admired because in the absence of any
principle of discrimination between incomes which
are payment for functions and incomes which are
not, all incomes, merely because they represent
wealth, stand on the same level of appreciation, and
are estimated solely by their magnitude, so that in
all societies which have accepted industrialism
there is an upper layer which claims the enjoyment
of social hfe, while it repudiates its responsibiHties.
The rentier and his ways, how familiar they were in
England before the war ! A public school and then
club life in Oxford and Cambridge, and then another
club in town ; London in June, when London is
pleasant, the moors in August, and pheasants in

38 THE ACQUISITIVE SOCIETY

October, Cannes in December and hunting in
February and March ; and a whole world of rising
bourgeoisie eager to imitate them, sedulous to make
their expensive watches keep time with this pre-
posterous calendar 1

The second consequence is the degradation of
those who labour, but who do not by their labour
command large rewards ; that is of the great
majority of mankind. And this degradation
follows inevitably from the refusal of men to give
the purpose of industry the first place in their
thoughts about it. When they do that, when their
minds are set upon the fact that the meaning of
industry is the service of man, all who labour
appear to them honourable, because all who labour
serve, and the distinction which separates those
who serve from those who merely spend is so
crucial and fundamental as to obliterate all minor
distinctions based on differences of income. But
when the criterion of function is forgotten, the only
criterion which remains is that of wealth, and an
Acquisitive Society reverences the possession of
wealth, as a Functional Society would honour, even
in the person of the humblest and most laborious
craftsman, the arts of creation.

So wealth becomes the foundation of public
esteem, and the mass of men who labour, but who
do not acquire wealth, are thought to be vulgar and
meaningless and insignificant compared with the
few who acquire wealth by good fortune, or by the
skilful use of economic opportunities. They come
to be regarded, not as the ends for which alone it
is worth while to produce wealth at all, but as the
instruments of its acquisition by a world that de-

THE NEMESIS OF INDUSTRIALISM 39

clines to be soiled by contact with what is thought
to be the dull and sordid business of labour. They
are not happy, for the reward of all but the very
mean is not merely money, but the esteem of their
feUow men, and they know they are not esteemed,
as soldiers, for example, are esteemed, though it is
because they give their lives to making civilization
that there is a civilization which it is worth while
for soldiers to defend. They are not esteemed, be-
cause the admiration of society is directed towards
those who get, not towards those who give ; and
though workmen give much they get Httle. And
the rentiers whom they support are not happy ;
for in discarding the idea of function, which sets a
limit to the acquisition of riches, they have also
discarded the principle which alone gives riches
their meaning. Hence unless they can persuade
themselves that to be rich is in itself meritorious,
they may bask in social admiration, but they are
unable to esteem themselves. For they have
abolished the principle which makes activity
significant, and therefore estimable. They are,
indeed, more truly pitiable than some of those who
envy them. For, like the spirits in the Inferno, they
are punished by the attainment of their desires.
A society ruled by these notions is necessarily the
victim of an irrational inequality. To escape such
inequality it is necessary to recognize that there is
some principle which ought to limit the gains of
particular classes and particular individuals, be-
cause gains drawn from certain sources or exceeding
certain amounts are illegitimate. But such a
limitation implies a standard of discrimination,
which is inconsistent with the assumption that

40 THE ACQUISITIVE SOCIETY

each man has a right to what he can get, irrespec-
tive of any service rendered for it. Thus privilege,
which was to have been exorcised by the gospel of
1789, returns in a new guise, the creature no longer
of unequal legal rights thwarting the natural
exercise of equal powers of hand and brain, but of
unequal powers springing from the exercise of equal
rights in a world where property and inherited
wealth and the apparatus of class institutions have
made opportunities unequal.

Inequality, again, leads to the misdirection of
production. For, since the demand of one income
of ^£50,000 is as powerful a magnet as the demand of
500 incomes of J[^ioo, it diverts energy from the
creation of wealth to the multiplication of luxuries,
so that, for example, while one-tenth of the people
of England are overcrowded, a considerable part of
them are engaged, not in supplying that deficiency,
but in making rich men's hotels, luxurious yachts,
and motor-cars like that used by a Secretary of
State for War, "with an interior inlaid with silver ir
quartered mahogany, and upholstered in fawn
suede and morocco," which was afterwards bought
by a suburban capitahst, by way of encouraging
useful industries and rebuking pubHc extravagance
with an example of private economy, for the trifling
sum of 3,550 guineas.

Thus part of the goods which are annually pro-
duced, and which are called wealth, is, strictly
speaking, waste, because it consists of articles which,
though reckoned as a part of the income of the
nation, either should not have been produced until
other articles had already been produced in sufficient
abundance, or should not have been produced at all.

THE NEMESIS OF INDUSTRIALISM 41

And some part of the population is employed in
making goods which no man can make with happi-
ness, or indeed without loss of self-respect, because
he knows that they had much better not be made,
and that his life is wasted in making them. Every-
body recognizes that the army contractor, who, in
time of war, set several hundred navvies to dig an
artificial lake in his grounds, was not adding to, but
subtracting from, the wealth of the nation. But
in time of peace many hundred thousand workmen,
if they are not digging ponds, are doing work which
is equally foolish and wasteful ; though, in peace, as
in war, there is important work, which is waiting
to be done, and which is neglected.

It is neglected because, while the effective de-
mand of the mass of men is only too small, there is a
small class which wears several men's clothes, eats
several men's dinners, occupies several families'
houses, and lives several men's lives. As long as a
minority has so large an income that part of it, if
spent at all, must be spent on trivialities, so long
will part of the human energy and mechanical
equipment of the nation be diverted from serious
work, which enriches it, to making trivialities,
which impoverishes it, since they can only be made
at the cost of not making other things. And if the
peers and millionaires who are now preaching the
duty of production to miners and dock labourers
desire that more wealth, not more waste, should be
produced, the simplest way in which they can
achieve their aim is to transfer to the public their
whole incomes over (say) £1,000 a year, in order
that it may be spent in setting to work, not garden-
ers, chauffeurs, domestic servants and shopkeepers

42 THE ACQUISITIVE SOCIETY

in the West End of London, but builders, mechanics
and teachers.

So to those who clamour, as many now do, "Pro-
duce ! Produce ! " one simple question may be
addressed : — " Produce what ? " Food, clothing,
house-room, art, knowledge ? By all means !
But if the nation is scantily furnished with these
things had it not better stop producing a good many
others which fill shop windows in Regent Street ?
If it desires to re-equip its industries with machinery
and its railways with wagons, had it not better
refrain from holding exhibitions designed to en-
courage rich men to re-equip themselves with
motor-cars ? What can be more childish than to
urge the necessity that productive power should
be increased, if part of the productive power which
exists already is misapplied ? Is not less produc-
tion of futilities as important as, indeed a con-
dition of, more production of things of moment ?
Would not " Spend less on private luxuries " be as
wise a cry as " produce more ? " Yet this result of
inequality, again, is a phenomenon which cannot
be prevented, or checked, or even recognized by a
society which excludes the idea of purpose from its
social arrangements and industrial activity. For
to recognize it is to admit that there is a principle
superior to the mechanical play of economic forces,
which ought to determine the relative importance
of different occupations, and thus to abandon the
view that all riches, however composed, are an end,
and that all economic activity is equally justifiable.
^^ The rejection of the idea of purpose involves
another consequence which every one laments, but
which no one can prevent, except by abandoning

THE NEMESIS OF INDUSTRIALISM 43

the belief that the free exercise of rights is the main
interest of society and the discharge of obligations a
secondary and incidental consequence which may
be left to take care of itself. It is that social life is
turned into a scene of fierce antagonisms, and that
a considerable part of industry is carried on in the
intervals of a disguised social war. The idea that
industrial peace can be secured merely by the
exercise of tact and forbearance is based on the
idea that there is a fundamental identity of interest
between the different groups engaged in it, which
is occasionally interrupted by regrettable mis-
understandings. Both the one idea and the other
are an illusion. The disputes which matter are not
caused by a misunderstanding of identity of inter-
ests, but by a better understanding of diversity of
interests. Though a formal declaration of war is
an episode, the conditions which issue in a declara-
tion of war are permanent ; and what makes them
permanent is the conception of industry which also
makes inequahty and functionless incomes per-
manent. It is the denial that industry has any
end or purpose other than the satisfaction of those
engaged in it.

That motive produces industrial warfare, not as a
regrettable incident, but as an inevitable result.
It produces industrial war, because its teaching
is that each individual or group has a right to what
they can get, and denies that there is any principle,
other than the mechanism of the market, which deter-
mines what they ought to get. For, since the in-
come available for distribution is limited, and since,
therefore, when certain limits have been passed,
what one group gains another group must lose, it is

44 THE ACQUISITIVE SOCIETY

evident that if the relative incomes of different
groups are not to be determined by their functions,
there is no method other than mutual self-assertion
which is left to determine them. Self-interest, indeed,
may cause them to refrain from using their full
strength to enforce their claims, and, in so far as
this happens, peace is secured in industry, as men
have attempted to secure it in international affairs,
by a balance of power. But the maintenance of
such a peace is contingent upon the estimate of
the parties to it that they have more to lose than to
gain by an overt struggle, and is not the result of
their acceptance of any standard of remuneration
as an equitable settlement of their claims. Hence
it is precarious, insincere and short. It is without
finality, because there can be no finality in the
mere addition of increments of income, any more
than in the gratification of any other desire for
material goods. When demands are conceded the
old struggle recommences upon a new level, and will
always recommence as long as men seek to end it
merely by increasing remuneration, not by finding
a principle upon which all remuneration, whether
large or small, should be based.

Such a principle is offered by the idea of function,
because its application would eliminate the sur-
pluses which are the subject of contention, and
would make it evident that remuneration is based
upon service, not upon chance or privilege or the
power to use opportunities to drive a hard bargain.
But the idea of function is incompatible with the
doctrine that every person and organization have
an unlimited right to exploit their economic oppor-
tunities as fully as they please, which is the working

THE NEMESIS OF INDUSTRIALISM 45

faith of modern industry ; and, since it is not
accepted, men resign themselves to the settlement
of the issue by force, or propose that the State
should supersede the force of private associations by
the use of its force, as though the absence of a prin-
ciple could be compensated by a new kind of
machinery. Yet all the time the true cause of
industrial warfare is as simple as the true cause of
international warfare. It is that if men recognize
no law superior to their desires, then they must
fight when their desires collide ; for though groups
or nations which are at issue with each other
may be willing to submit to a principle which is
superior to them both, there is no reason why they
should submit to each other.

Hence the idea, which is popular with rich men,
that industrial disputes would disappear if only the
output of wealth were doubled, and every one were
twice as well off, not only is refuted by all practical
experience, but is in its very nature founded upon
an illusion. For the question is one, not of amounts,
but of proportions ; and men will fight to be paid
j^30 a week, instead of £20, as readily as they will
fight to be paid £^ instead of ^^4, as long as there is
no reason why they should be paid £20 instead of
£30, and as long as other men who do not work are
paid anything at all. If miners demanded higher
wages when every superfluous charge upon coal-
getting had been eliminated, there would be a
principle with which to meet their claims, the
principle that one group of workers ought not to
encroach upon the livelihood of others. But as long
as mineral owners extract royalties, and excep-
tionally productive mines pay thirty per cent, to

46 THE ACQUISITIVE SOCIETY

absentee shareholders, there is no vahd answer to a
demand for higher wages. For if the community
pays anything at all to those who do not work, it
can afford to pay more to those who do. The
naive complaint, that workmen are never satisfied,
is, therefore, strictly true. It is true, not only of
workmen, but of all classes in a society which con-
ducts its affairs on the principle that wealth,
instead of being proportioned to function, belongs
to those who can get it. They are never satisfied,
nor can they be satisfied. For as long as they make
that principle the guide of their individual lives and
of their social order, nothing short of infinity
could bring them satisfaction.

So here, again, the prevalent insistence upon
rights, and prevalent neglect of functions, brings
men into a vicious circle from which they cannot
escape, without escaping from the false philosophy
which dominates them. But it does something
more. It makes that philosophy itself seem
plausible and exhilarating, and a rule not only for
industry, in which it had its birth, but for politics
and culture and religion and the whole compass
of social life. The possibility that one aspect of
human life may be so exaggerated as to over-
shadow, and in time to atrophy, every other, has
been made familar to Enghshmen by the example
of " Prussian militarism." Militarism is the char-
acteristic, not of an army, but of a society. Its
essence is not any particular quaHty or scale of
military preparation, but a state of mind, which,
in its concentration on one particular element in
social life, ends finally by exalting it until it be-

THE NEMESIS OF INDUSTRIALISM 47

comes the arbiter of all the rest. The purpose for
which military forces exist is forgotten. They are
thought to stand by their own right and to need no
justification. Instead of being regarded as an
instrument which is necessary in an imperfect
world, they are elevated into an object of super-
stitious veneration, as though the world would be
a poor insipid place without them, so that political
institutions and social arrangements and intellect
and morality and religion are crushed into a mould
made to fit one activity, which in a sane society
is a subordinate activity, like the police, or the
maintenance of prisons, or the cleansing of sewers,
but which in a militarist state is a kind of mystical
epitome of society itself.

Militarism, as Englishmen see plainly enough, is
fetish worship. It is the prostration of men's souls
and the laceration of their bodies to appease
an idol. What they do not see is that their rever-
ence for economic activity and industry and what is
called business is also fetish worship, and that, in
their devotion to that idol, they torture themselves
as needlessly and indulge in the same meaningless
antics as the Prussians did in their worship of
militarism. For what the military tradition and
spirit did for Prussia, with the result of
creating militarism, the commercial tradition and
spirit have done for England, with the result of
creating industrialism. Industrialism is no more
the necessary characteristic of an economically de-
veloped society than militarism is a necessary
characteristic of a nation which maintains military
forces. It is no more the result of applying science
to industry than militarism is the result of the

48 THE ACQUISITIVE SOCIETY

application of science to war, and the idea that it is
something inevitable in a community which uses
coal and iron and machinery, so far from being the
truth, is itself a product of the perversion of mind
which industrialism produces. Men may use
what mechanical instruments they please and be
none the worse for their use. What kills their
souls is when they allow their instruments to
use them. The essence of industriahsm, in short,
is not any particular method of industry,
but a particular estimate of the importance of
industry, which results in it being thought the
only thing that is important at all, so that
it is elevated from the subordinate place which
it should occupy among human interests and
activities into being the standard by which all
other interests and activities are judged.

When a Cabinet Minister declares that the great-
ness of this country depends upon the volume of its
exports, so that France, which exports comparative-
ly little, and Elizabethan England, which exported
next to nothing, are presumably to be pitied as
altogether inferior civilizations, that is Industrial-
ism. It is the confusion of one minor department
of life with the whole of life. When manufacturers
cry and cut themselves with knives, because it is
proposed that boys and girls of fourteen shall
attend school for eight hours a week, and the
President of the Board of Education is so gravely
impressed by their apprehensions, that he at once
allows the hours to be reduced to seven, and
then suspends the system altogether, that is
Industrialism. It is fetish worship. When the
Government obtains money for a war, which costs

THE NEMESIS OF INDUSTRIALISM 49

£7,000,000 a day, by closing the Museums, which
cost j^20,ooo a year, that is IndustriaHsm. It is
a contempt for all interests which do not contribute
obviously to economic activity. When the Press
clamours that the one thing needed to make this
island an Arcadia is productivity, and more pro-
ductivity, and yet more productivity, that is Indus-
trialism. It is the confusion of means with ends.

Men will always confuse means with ends if they
are without any clear conception that it is the ends,
not the means, which matter — if they allow their
minds to slip from the fact that it is the social
purpose of industry which gives it meaning and
makes it worth while to carry it on at all. And when
they do that, they will turn their whole world
upside down, because they do not see the poles
upon which it ought to move. So when, like Eng-
land, they are thoroughly industrialized, they be-
have Hke Prussia, which was thoroughly militarized.
They talk as though man existed for industry,
instead of industry existing for man, as the Prus-
sians sometimes talked of man existing for war.
They resent any activity which is not coloured
by the predominant interest, because it seems a
rival to it. So they destroy religion and art and
morality, which cannot exist unless they are dis-
interested ; and having destroyed these, which are
the end, for the sake of industry, which is a means,
they make their industry itself what they make
their cities, a desert of unnatural dreariness, which
only forgetfulness can make endurable, and which
only excitement can enable them to forget.

Torn by suspicions and recriminations, avid of
power and oblivious of duties, desiring peace, but

50 THE ACQUISITIVE SOCIETY

unable to " seek peace and ensue it," because un-
willing to surrender the creed which is the cause of
war, to what can one compare such a society but
to the international world, which also has been
called a society, and which also is social in nothing
but name ? And the comparison is more than a
play upon words. It is an analogy which has its
roots in the facts of history. It is not a chance that
the last two centuries, which saw the growth of
a new system of industry, saw also the growth of
the system of international politics which came to
a climax in the period from 1870 to 1914. Both the
one and the other are the expression of the same
spirit and move in obedience to similar laws. The
essence of the former was the repudiation of any
authority superior to the individual reason. It
left men free to follow their own interests or am-
bitions or appetites, untrammelled by subordination
to any common centre of allegiance. The essence
of the latter was the repudiation of any authority
superior to the sovereign state, which again was
conceived as a compact self-contained unit — a unit
which would lose its very essence if it lost its inde-
pendence of other states. Just as the one emanci-
pated economic activity from a mesh of antiquated
traditions, so the other emancipated nations from
arbitrary subordination to alien races or Govern-
ments, and turned them into nationalities with a
right to work out their own destiny.

Nationalism is, in fact, the counterpart among
nations of what individualism is within them. It
has similar origins and tendencies, similar triumphs
and defects. For nationalism, like individualism,
lays its emphasis on the rights of separate units, not

THE NEMESIS OF INDUSTRIALISM 51

on their subordination to common obligations,
though its units are races or nations, not individual
men. Like individualism it appeals to the self-assert-
ive instincts, to which it promises opportunities of
unlimited expansion. Like individualism it is a
force of immense explosive power, the just claims
of which must be conceded before it is possible to
invoke any alternative principle to control its
operations. For one cannot impose a supernational
authority upon irritated or discontented or oppress-
ed nationalities, any more than one can subordinate
economic motives to the control of society, until
society has recognized that there is a sphere which
they may legitimately occupy.

And, like nationahsm, if pushed to its logical
conclusion, individualism, is self-destructive. For,
as nationalism, in its brilliant youth, begins
as a claim that nations, because they are
spiritual beings, shall determine themselves, and
passes too often into a claim that they shall
dominate others, so individualism begins by assert-
ing the right of men to make of their own lives
what they can, and ends by condoning the subjec-
tion of the majority of men to the few whom good
fortune, or special opportunity, or privilege have
enabled most successfully to use their rights. They
rose together. It is probable that, if ever they
decline, they will decline together. For life can-
not be cut in compartments. In the long run the
world reaps in war what it sows in peace. And to
expect that international rivalry can be exorcised
as long as the industrial order within each nation
is such as to give success to those whose whole
existence is a struggle for self-aggrandizement is a

52 THE ACQUISITIVE SOCIETY

dream which has not even the merit of being
beautiful.

So the perversion of nationaUsm is imperiaHsm,
as the perversion of individualism is industriahsm.
And the perversion comes, not through any flaw
or vice in human nature, but by the force of the idea,
because the principle is defective and reveals its
defects as it reveals its power. For it asserts that
the rights of nations and individuals are absolute,
which is false, instead of asserting that they are
absolute in their own sphere, but that their sphere
itself is contingent upon the part which they play in
the community of nations and individuals, which is
true. Thus it constrains them to a career of in-
definite expansion, in which they devour continents
and oceans, law, morality and religion, and last of
all their own souls, in an attempt to attain infinity
by the addition to themselves of all that is finite.
In the meantime their rivals, and their subjects,
and they themselves are conscious of the danger of
opposing forces, and seek to purchase security and
to avoid a collision by organizing a balance of power.
But the balance, whether in international politics
or in industry, is unstable, because it reposes not
on the common recognition of a principle by which
the claims of nations and individuals are Hmited,
but on an attempt to find an equipoise which may
avoid a conflict without abjuring the assertion of
unlimited claims. No such equipoise can be found,
because, in a world where the possibilities of in-
creasing military or industrial power are illimitable,
no such equipoise can exist.

Thus, as long as men move on this plane, there is
no solution. They can obtain peace only by

THE NEMESIS OF INDUSTRIALISM 53

surrendering the claim to the unfettered exercise of
their rights, which is the cause of war. What we
have been witnessing, in short, during the past
seven years, both in international affairs and in
industry, is the breakdown of the organization of
society on the basis of rights divorced from obliga-
tions. Sooner or later the collapse was inevitable,
because the basis was too narrow. For a right is
simply a power which is secured by legal sanctions,
" a capacity," as the lawyers define it, " residing
in one man, of controlling, with the assistance of
the state, the action of others," and a right should
not be absolute for the same reason that a power
should not be absolute. No doubt it is better that
individuals should have absolute rights than that the
State or the Government should have them ; and
it was the reaction against the abuses of absolute
power by the State which led in the eighteenth
century to the declaration of the absolute rights of
individuals. The most obvious defence against the
assertion of one extreme was the assertion of the
other. Because Governments and the relics of
feudalism had encroached upon the property of
individuals it was affirmed that the right of property
was absolute ; because they had strangled enter-
prise, it was affirmed that every man had a natural
right to conduct his business as he pleased.

But, in reahty, both the one assertion and the
other are false, and, if applied to practice, must lead
to disaster. The State has no absolute rights ;
they are limited by its commission. The individual
has no absolute rights ; they are relative to the
function which he performs in the community of
which he is a member, because, unless they are so

54 THE ACQUISITIVE SOCIETY

limited, the consequence must be something in the
nature of private war. All rights, in short, are con-
ditional and derivative, because all power should be
conditional and derivative. They are derived from
the end or purpose of the society in which they exist.
They are conditional on being used to contribute
to the attainment of that end, not to thwart it.
And this means in practice that, if society is to be
healthy, men must regard themselves not as the
owners of rights, but as trustees for the discharge of
functions and the instruments of a social purpose.

PROPERTY AND CREATIVE WORK.

The application of the principle that society should
be organized upon the basis of functions, is not
recondite, but simple and direct. It offers in the
first place, a standard for discriminating between
those types of private property which are legitimate
and those which are not. During the last century
and a half, poHtical thought has oscillated between
two conceptions of property, both of which, in their
different ways, are extravagant.

On the one hand, the practical foundation of
social organization has been the doctrine that the
particular forms of private property which exist
at any moment are a thing sacred and inviolable,
that anything may properly become the object of
property rights, and that, when it does, the title to
it is absolute and unconditioned. The modern
industrial system took shape in an age when this
theory of property was triumphant. The American
Constitution and the French Declaration of the
Rights of Man both treated property as one of the
fundamental rights which Governments exist to
protect. The EngHsh Revolution of 1688, undog-
matic and reticent though it was, had in effect done
the same. The great individualists from Locke to
Turgot, Adam Smith and Bentham all repeated, in
different language, a similar conception. Though
what gave the Revolution its diabolical character

55

56 THE ACQUISITIVE SOCIETY

in the eyes of the EngHsh upper classes was its
treatment of property, the dogma of the sanctity
of private property was maintained as tenaciously
by French Jacobins as by English Tories ; and the
theory that property is an absolute, which is held
by many modern Conservatives, is identical, if only
they knew it, with that not only of the men of 1789,
but of the terrible Convention itself.

On the other hand, the attack has been almost as
undiscriminating as the defence. " Private pro-
perty " has been the central position against which
the social movement of the last hundred years has
directed its forces. The criticism of it has ranged
from an imaginative communism in the most
elementary and personal of necessaries, to prosaic
and partially realized proposals to transfer certain
kinds of property from private to public owner-
ship, or to limit their exploitation by restrictions
imposed by the State. But, however varying in
emphasis and in method, the general note of what
may conveniently be called the Socialist criticism
of property is what the word Socialism itself im-
plies. Its essence is the statement that the econ-
omic evils of society are primarily due to the un-
regulated operation, under modern conditions of
industrial organization, of the institution of private
property.

The divergence of opinion is natural, since in
most discussions of property the opposing theorists
have usually been discussing different things.
Property is the most ambiguous of categories. It
covers a multitude of rights which have nothing in
common except that they are exercised by persons
and enforced by the State. Apart from these

PROPERTY AND CREATIVE WORK 57

formal characteristics, they vary indefinitely in
economic character, in social effect, and in moral
justification. They may be conditional like the
grant of patent rights, or absolute like the ownership
of ground rents, terminable like copyright, or per-
manent like a freehold, as comprehensive as sov-
ereignty or as restricted as an easement, as intimate
and personal as the ownership of clothes and books,
or as remote and intangible as shares in a gold mine
or rubber plantation.

It is idle, therefore, to present a case for or
against private property without specifying the
particular forms of property to which reference is
made, and the journalist who says that " private
property is the foundation of civilization " agrees
with Proudhon, who said that it was theft, in this
respect at least that, without further definition, the
words of both are meaningless. Arguments which
support or demolish certain kinds of property may
have no application to others ; considerations
which are conclusive in one stage of economic
organization may be almost irrelevant in the next.
The course of wisdom is neither to attack private
property in general nor to defend it in general ; for
things are not similar in quality, merely because
they are identical in name. It is to discriminate
between the various concrete embodiments of
what, in itself, is, after all, little more than an
abstraction.

(a) The Traditional Doctrine.

The origin and development of different kinds of
proprietary rights is not material to this discussion.
Whatever may have been the historical process

S8 THE ACQUISITIVE SOCIETY

by which they have been established and recognized,
the rationale of private property traditional in
England is that which sees in it either the results
of the personal labour of its owner, or — what is
in effect the same thing — the security that each
man will reap where he has sown. Locke argued
that a man necessarily and legitimately becomes
the owner of " whatsoever he removes out of the
state that nature hath provided," and that " he
makes it his property " because he " hath mixed
his labour with it." Paley derived property from
the fact that " it is the intention of God that the
produce of the earth be applied to the use of man,
and this intention cannot be fulfilled without
establishing property." Adam Smith, who wrote
the dangerous sentence, " Civil Government, in so
far as it is instituted for the protection of property,
is in reality instituted for the defence of the rich
against the poor," sometimes spoke of property
as the result of usurpation — " Landlords, like
other men, love to reap where they have never
sowed " — but in general ascribed it to the need
of offering protection to productive effort. '* If I
despair of enjoying the fruits of labour," said
Bentham, repeating what were in all essentials the
utilitarian arguments of Hume, " I shall only live
from day to day ; I shall not undertake labours
which will only benefit my enemies." This theory
passed into America, and became the foundation
of the sanctity ascribed to property in ^he Feder-
alist and implied in a long line of judicial decisions
on the Fourteenth Amendment to the Constitution.
Property, it is argued, is a moral right, and not
merely a legal right, because it insures that the

PROPERTY AND CREATIVE WORK 59

producer will not be deprived by violence of the
result of his efforts.

The period from which that doctrine was in-
herited differed from our own in three obvious, but
significant, respects. Property in land and in the
simple capital used in most industries was widely
distributed. Before the rise of capitalist agricul-
ture and capitalist industry, the ownership, or at
any rate the secure and effective occupation, of land
and tools by those who used them, was a condition
precedent to effective work in the field or in the
workshop. The forces which threatened property
were the fiscal policy of Governments and in some
countries, for example France, the decaying relics
of feudalism. The interference both of the one and
of the other involved the sacrifice of those who
carried on useful labour to those who did not. To
resist them was to protect not only property but
industry, which was indissolubly connected with
it. Too often, indeed, resistance was ineffective.
Accustomed to the misery of the rural proprietor in
France, Voltaire remarked with astonishment that
in England the peasant may be rich, and " does not
fear to increase the number of his beasts or to
cover his roof with tiles." And the English Parlia-
mentarians and the French philosophers who made
the inviolability of property rights the centre of
their political theory, when they defended those
who owned, were incidentally, if sometimes un-
intentionally, defending those who laboured. They
were protecting the yeoman, or the master crafts-
man, or the merchant from seeing the fruits of his
toil squandered by the hangers-on at St. James or
the courtly parasites of Versailles.

6o THE ACQUISITIVE SOCIETY

In such circumstances the doctrine which found
the justification of private property in the fact that
it enabled the industrious man to reap where he
had sown, was not a paradox, but, as far as the
mass of the population was concerned, almost a
truism. Property was defended as the most sacred
of rights. But it was defended as a right which was
not only widely exercised, but which was indispens-
able to the performance of the active function of
providing food and clothing. For it consisted pre-
dominantly of one of two types, land or tools which
were used by the owner for the purpose of produc-
tion, and personal possessions which were the
necessities or amenities of civilized existence. The
former had its rationale in the fact that the land
of the peasant or the tools of the craftsman were
the condition of his rendering the economic services
which society required ; the latter because furni-
ture and clothes are indispensable to a life of
decency and comfort.

The proprietary rights— and, of course, they
were numerous — which had their source, not in
work, but in predatory force, were protected from
criticism by the wide distribution of some kind of
property among the mass of the population, and in
England, at least, the cruder of them were gradually
whittled down. When property in land and such
simple capital as existed were generally diffused
among all classes of society, when, in most parts
of England, the typical workman was not a labourer
but a peasant or small master, who could point
to the strips which he had ploughed or the cloth
which he had woven, when the greater part of the
wealth passing at death consisted of land, house-

PROPERTY AND CREATIVE WORK 6i

hold furniture and a stock in trade which was
hardly distinguishable from it, the moral justifi-
cation of the title to property was self-evident. It
was obviously, what theorists said that it was, and
plain men knew it to be, the labour spent in pro-
ducing, acquiring and administering it.

Such property was not a burden upon society,
but a condition of its health and efficiency, and
indeed, of its continued existence. To protect it
was to maintain the organization through which
public necessities were supplied. If, as in Tudor
England, the peasant was evicted from his holding
to make room for sheep, or crushed, as in eighteenth
century France, by arbitrary taxation and seig-
neurial dues, land went out of cultivation and the
whole community was short of food. If the tools
of the carpenter or smith were seized, ploughs were
not repaired or horses shod. Hence, before the
rise of a commercial civilization, it was the mark of
statesmanship, alike in the England of the Tudors
and in the France of Henry IV, to cherish the small
property-owner even to the point of offending the
great. Popular sentiment idealized the yeoman —
" the Joseph of the country who keeps the poor
from starving " — not merely because he owned
property, but because he worked on it. It de-
nounced that " bringing of the livings of many into
the hands of one," which capitalist societies re-
gard with equanimity as an inevitable, and, appar-
ently, a laudable result of economic development,
cursed the usurer who took advantage of his neigh-
bour's necessities to live without labour, and was
shocked by the callous indifference to public
welfare shown by those who " not having before

62 THE ACQUISITIVE SOCIETY

their eyes either God or the profit and advantage
of the realm, have enclosed with hedges and dykes
towns and hamlets." And it was sufficiently
powerful to compel Governments to intervene to
prevent the laying of field to field, and the engross-
ing of looms — to set limits, in short, to the scale
to which property might grow.

When Bacon, who commended Henry VII for
protecting the tenant right of the small farmer, and
pleaded in the House of Commons for more drastic
land legislation, wrote " Wealth is like muck. It
is not good but if it be spread," he was expressing
in an epigram what was the commonplace of every
writer on politics from Fortescue at the end of the
fifteenth century to Harrington in the middle of
the seventeenth. The modern conservative, who
is inclined to take au pied de la lettre the vigorous
argument in which Lord Hugh Cecil denounces the
doctrine that the maintenance of proprietary
rights ought to be contingent upon the use to
which they are put, may be reminded that Lord
Hugh's own theory is of a kind to make his ancestors
turn in their graves. Of the two members of the
family who achieved distinction before the nine-
teenth century, the elder advised the Crown to
prevent landlords evicting tenants, and actually
proposed to fix a pecuniary maximum to the
property which different classes might possess ;
the younger attacked enclosing in Parliament,
and carried legislation compelling landlords
to build cottages, to let them with small holdings,
and to plough up pasture.*

*Hist. MSS. Com. MSS. of the Marquis of Salisbury,
Part I., pp. 162-3 '■ (^'^d D' Ewes' Journal, pp. 674.

b

PROPERTY AND CREATIVE WORK 63

William and Robert Cecil were sagacious and
responsible men, and their view that the protection
of property should be accompanied by the enforce-
ment of obligations upon its owners was shared by
most of their contemporaries. The idea that the
institution of private property involves the right
of the owner to use it, or refrain from using it, in
such a way as he may please, and that its principal
significance is to supply him with an income,
irrespective of any duties which he may discharge,
would not have been understood by most public
men of that age, and, if understood, would have
been repudiated with indignation by the more re-
putable among them. They found the meaning of
property in the public purposes to which it con-
tributed, whether they were the production of
food, as among the peasantry, or the management
of public affairs, as among the gentry, and hesitated
neither to maintain those kinds of property which
met these obligations nor to repress those uses of
it which appeared likely to conflict with them.

Property was to be an aid to creative work, not
an alternative to it. The patentee was secured
protection for a new invention, in order to secure
him the fruits of his own brain, but the monopolist
who grew fat on the industry of others was to be
put down. The law of the village bound the
peasant to use his land, not as he himself might
find most profitable, but to grow the corn the
village needed. The law of the State forbad the
landlord to " depopulate " villages, or to convert
arable to pasture. Long after political changes had
made direct interference impracticable, even the
higher ranks of English landowners continued to

64 THE ACQUISITIVE SOCIETY

discharge, however capriciously and tyrannically,
duties which were vaguely felt to be the contribu-
tion which they made to the public service in virtue
of their estates. When as in France, the obligations
of ownership were repudiated almost as completely
as they have been by the owner of to-day, nemesis
came in an onslaught upon the position of a
noblesse which had retained its rights and abdicated
its functions. Property reposed, in short, not
merely upon convenience, or on the appetite for gain,
but on a moral principle. It was protected not
only for the sake of those who owned, but for the
sake of those who worked and of those for whom
their work provided. It was protected, because,
without security for property, wealth could not
be produced or the business of society carried on.

(Z>) The Divorce of Ownership and Work.

Whatever the future may contain, the past has
shown no more excellent social order than that in
which the mass of the people were the masters of
the holdings which they ploughed and of the tools
with which they worked, and could boast, with the
English freeholder, that "it is a quietness to a man's
mind to live upon his own and to know his heir
certain." With this conception of property and
its practical expression in social institutions those
who urge that society should be organized on the
basis of function have no quarrel. It is in agree-
ment with their own doctrine, since it justifies
property by reference to the services which it
enables its owner to perform. All that they need
ask is that it should be carried to its logical con-
clusion.

r

PROPERTY AND CREATIVE WORK 6

For the argument has evidently more than one
edge. If it justifies certain types of property, it
condemns others ; and in the conditions of modern
industrial civilization, what it justifies is less
than what it condemns. The truth is, indeed, that
this theory of property, and the institutions in
which it is embodied, have survived into an age in
which the whole structure of society is radically
different from that in which it was formulated, and
which made it a valid argument, if not for all, at
least for the most common and characteristic, kinds
of property. It is not merely that the ownership
of any substantial share in the national wealth is
concentrated to-day in the hands of a few hundred
thousand families, and that at the end of an age
which began with an aflRrmation of the rights of
property, proprietary rights are, in fact, far from
being widely distributed. Nor is it merely that
what makes property insecure to-day is not the
arbitrary taxation of unconstitutional monarchies
or the privileges of an idle noblesse^ but the in-
satiable expansion and aggregation of property
itself, which menaces with absorption all property
less than the greatest, the small master, the little
shopkeeper, the country bank, and has turned the
mass of mankind into a proletariat working under
the agents and for the profit of those who own.

The characteristic fact, which differentiates
most modern property from that of the pre-
industrial age, and which turns against it the very
reasoning by which formerly it was supported, is
that in modern economic conditions ownership
is not active, but passive, that to most of those
who own property to-day it is not a means of work

66 THE ACQUISITIVE SOCIETY

but an instrument for the acquisition of gain or
the exercise of power, and that there is no guarantee
that gain bears any relation to service, or power
to responsibility. For property which can be
regarded as a condition of the performance of
function, like the tools of the craftsman, or the
holding of the peasant, or the personal possessions
which contribute to a life of health and efficiency,
forms an insignificant proportion, as far as its
value is concerned, of the property rights existing
at present. In modern industrial societies the
great mass of property consists, as the annual re-
view of wealth passing at death reveals, neither of
personal acquisitions such as household furniture,
nor of the owner's stock-in-trade, but of rights of
various kinds, such as royalties, ground-rents, and,
above all, of course shares in industrial under-
takings, which yield an income irrespective of any
personal service rendered by their owners. Owner-
ship and use are normally divorced. The greater
part of modern property has been attenuated to a
pecuniary lien or bond on the product of industry,
which carries with it a right to payment, but
which is normally valued precisely because it
relieves the owner from any obligation to perform.
a positive or constructive function.

Such property may be called Passsive Property, or
Property for Acquisition, for Exploitation, or for
Power, to distinguish it from the property which is
actively used by its owner for the conduct of his
profession or the upkeep of his household. To the
lawyer the first is, of course, as fully property as
the second. It is questionable, however, whether
economists should call it " Property " at all, and not

PROPERTY AND CREATIVE WORK G'j

rather, as Mr. Hobson has suggested, " Impro-
perty," since it is not identical with the rights
which secure the owner the produce of his toil, but
is the opposite of them. A classification of propriet-
ary rights based upon this difference would be in-
structive. If they were arranged according to the
closeness with which they approximate to one or
other of these two extremes, it would be found that
they were spread along a Hne stretching from property
which is obviously the payment for, and condition
of, personal services, to property which is merely
a right to payment from the services rendered
by others, in fact a private tax. The rough order
which would emerge, if all details and qualifications
were omitted, might be something as follows : —

1. Property in payments made for personal
services.

2. Property in personal possessions necessary
to health and comfort.

3. Property in land and tools used by their
owners.

4. Property in copyright and patent rights
owned by authors and inventors.

5. Property in pure interest, including much
agricultural rent.

6. Property in profits of luck and good fortune :
" quasi-rents."

7. Property in monopoly profits.

8. Property in urban ground rents.

9. Property in royalties.

The first four kinds of property clearly accom-
pany, and in some sense condition, the performance
of work. The last four clearly do not. Pure
interest has some affinities with both. It is obvious

68 THE ACQUISITIVE SOCIETY

that an undertaking or a society which saves itself
need not pay other persons to save for it ; it is
equally obvious that, if it is to save itself and thus
avoid the creation of a class of rentiers^ it must not
use for current consumption the whole of the
wealth annually produced. Pure interest, there-
fore, represents a necessary economic cost, the
equivalent of which must be borne whatever the
legal arrangements under which capital is held,
and is thus unlike the property represented by
profits (other than the equivalent of salaries and
payment for necessary risks), urban ground-rents
and royalties. It relieves the recipient from per-
sonal services, and thus resembles them.

" Without the former," said Sieyes, writing of
the third estate and the privileged orders,
" nothing can go on ; without the latter every-
thing would go on infinitely better." The crucial
question for any society is, under which of each of
these two broad groups of categories the greater
part (measured in value) of the proprietary rights
which it maintains are at any given moment to be
found. If they fall in the first class, creative
work will be encouraged and idleness will be de-
pressed ; if they fall in the second, the result will
be the reverse. The facts vary widely from age
to age and from country to country. Nor have
they ever been fully revealed ; for the lords of the
jungle do not hunt by daylight. It is probable,
at least, that in the England of 1550 to 1750, a
larger proportion of the existing property consisted
of land and tools used by their owners than either
in contemporary France, where feudal dues
absorbed a considerable proportion of the peasants'

PROPERTY AND CREATIVE WORK 69

income, or than in the England of 1 800 to 1 850, where
the new capitalist manufacturers made hundreds
per cent., while manual workers were goaded by
starvation into ineffectual revolt. It is probable
that in the nineteenth century, thanks to the
Revolution, France and England changed places,
and that, in this respect, not only Ireland, but the
British Dominions resemble the former rather than
the latter. The transformation can be studied best
of all in the United States, in parts of which the
population of peasant proprietors and small
masters of the early nineteenth century was re-
placed in three generations by the nightmare that
haunted Jefferson* — a propertyless proletariat
and a capitalist plutocracy. The abolition of the
economic privileges of agrarian feudalism, which,
under the name of equality, was the driving force
of the French Revolution, and which has taken
place, in one form or another, in all countries touched
by its influence, has been largely counterbalanced
since 1 800 by the growth of the inequalities spring-
ing from Industrialism.

Of these vital developments in the facts of
property, the conventional theory of property
appears hardly to have begun to take cognizance.
So far as England and America are concerned, the
current philosophy of the subject seems to have
been crystallized somewhere about the latter part
of the eighteenth century, and the orator who
expounds the sanctity of property would normally
express himself more accurately, if less eloquently,
by substituting for his peroration the words, " I
desire that the social organization of my country

*See his Notes on Virginia,

70 THE ACQUISITIVE SOCIETY

shall as far as possible be based upon legal prin-
ciples which were formulated in England in the
seventeenth century, and which were commonly
thought to be specially suitable to the economic
conditions existing in the reign of George III."
Nor is his attitude particularly culpable. The
institution of property has undergone in the
last few generations a transformation of bewildering
rapidity, and the failure of thought to keep pace
with it need cause no surprise.

It is rarely realized, indeed, how extremely modern
are those typical forms of property in which the
practical world of to-day is principally interested.
The most salient example is the share. Of all types
of property it is the commonest and most convenient.
It is a title to property stripped of almost all the
encumbrances by which property used often to be
accompanied. It yields an income and can be
disposed of at will. It makes its owner heir to the
wealth of countries to which he has never travelled
and a partner in enterprises of which he hardly
knows the name. To thousands of men to-day
shares and property are almost convertible terms.
The share is a product of the joint-stock company,
and in England the joint-stock company began
its career in the sixteenth century. But it took
nearly 300 years for the share to develop the char-
acteristic attributes which lend it its peculiar attract-
iveness to-day. Its disentanglement from the crude
contribution, sometimes in money, sometimes in
goods, to a common undertaking, in which it origin-
ated, took place with extraordinary slowness, and
it was only in the latter half of the nineteenth
century that the process was completed.

PROPERTY AND CREATIVE WORK 71

The " Joint-stock " of the East India Company
— to take an example from the greatest, though
not the earhest, of all corporate enterprises — had
for the greater part of a century no financial con-
tinuity.* It was subscribed afresh for every voyage,
or series of voyages, and repaid after it. It was
not until 1657 ^^^^ ^^^ practice of dividing capital
as well as profits was abandoned ; it was not until
after the Restoration that the shares became trans-
ferable. The "Bubble" Act of 1719 tried to put down
joint-stock finance — " shares in stocks transferable
or assignable " — altogether, except in companies
possessing royal or parliamentary authorization.
Well into the nineteenth century the law continued
to look with suspicion on the transferable share,
as a new and dubious form of property. Lord
Ellenborough in 1808 denounced the whole system
of raising capital by means of numerous small
subscriptions, and warned the parties in a case
which came before him to " forbear to carry
into operation . . . this mischievous project
founded on joint-stock and transferable shares."
Chief Justice Best, in 1828, objected to the practice
of assigning shares unless the company were a
corporation, or a joint-stock undertaking created
by Act of Parliament. " The assignee," he argued,
" can join in no action for a cause of action that
accrued before the assignment. Such rights of
action must still remain in the assignor, who, not-
withstanding he has retired from the company,
wiU still remain liable for every debt contracted
by the company before he ceases to be a member.
Indeed, the members of corporation cannot assign

♦For the financial organization and development of the Com-
pany, see Scott, Joint-Stock Companies to 1720, vol, ii, pp. 89-206.

72 THE ACQUISITIVE SOCIETY

their interest and force their assignees into the
corporation without the authority of an Act of
ParHament. ... It concerns the pubHc that
bodies, composed of a great number of persons,
with large disposable capitals, should not be
formed without the authority of the Crown, and
subject to such regulations as the King, in his
wisdom, may deem necessary for the public
security." Even in 1837 it could be held that a
joint-stock company, with shares assignable at the
will of the holder, was illegal. Even in 1859, ^^^^
years after the first general Limited Liability Act,
it was not certain that a broker who dealt in the
shares of an unincorporated company was acting
lawfully.*

The existence of this body of opinion at a time
so near to our own is significant. What it means
is that, down to less than two generations ago, the
type of property which is to-day most popular and
most universal was still regarded with suspicion as
a dubious innovation, to be tolerated only in the
special case of companies incorporated by Royal
Charter or by Act of Parliament. The assumption
of the law and of the business world was that, in
the normal undertaking, ownership and manage-
ment were vested in the hands of the same person.
Corporate finance, based on the existence of a
large body of shareholders, which is now the rule,
was then the exception. The contrast offered by that
attitude with the facts of industrial organization
as they exist to-day is an indication of the revolu-
tion in the nature of property in capital which has

*For these and other cases, see The Evolution of the Money-
Market, by Mr. E. T. PoweU.

PROPERTY AND CREATIVE WORK 73

taken place since the establishment of Limited
Liability in 1855, and the Companies Act of 1862.
In modern industrial communities the general
effect of recent economic development has been to
swell proprietary rights which entitle the owners to
payment without work, and to diminish those which
can properly be described as functional. The
expansion of the former, and the process by which
the simpler forms of property have been merged
in them, are movements the significance of which
it is hardly possible to over-estimate. There is still,
of course, a considerable body of property which
is of the older type. But though working land-
lords, and capitalists who manage their own busi-
nesses, continue to be in the aggregate a numerous
body, the organization for which they stand is
not that which is most representative of the modern
economic world.

The general tendency for the ownership and
administration of property to be separated, the
general refinement of property into a claim on
goods produced by an unknown worker, is as
unmistakable as the growth of capitalist in-
dustry and urban civilization themselves. Villa-
ges are turned into towns, and property in land
changes from the holding worked by a farmer or the
estate administered by a landlord into " rents,"
which are advertised and bought and sold like any
other investment. Mines are opened, and the
rights of the landlord are converted into a tribute
for every ton of coal which is brought to the surface.
As joint-stock companies take the place of the
individual enterprise which was typical of the
earlier years of the factory system, organization

74 THE ACQUISITIVE SOCIETY

passes from the employer who both owns and
manages his business, into the hands of salaried
officials, and again the mass of property-owners
is swollen by the multiplication of rentiers who
put their wealth at the disposal of industry, but
who have no other connection with it.

The census of manufactures for 191 4 gives a
picture of the change in the United States. It
shows that 80.2 per cent, of the wage-earners
were employed by corporations, that 91.4 per
cent, of the mineral products of the country
were produced under corporate direction, that in
banking less than i per cent, of the total resources
was represented by private banks, and that the
percentage of value added by manufacture in
establishments owned by corporations increased
from 63.3 per cent in 1899 to 81.9 per cent, in 1914.
For Great Britain no equally comprehensive
statistics are available. We do not know even
approximately what proportion the wage-earners
employed and the output produced by the 73,341
Companies, with a nominal capital of £3,083,086,049,
which were on the register of the Board of Trade
in 1 919, formed of the total workers and wealth
production of the country ; nor, when the legal
form is that of a limited company, is it clear to
what extent ownership is, in fact, divorced from
management. It is certain, however, that as far as
all the great staple industries, except agriculture and
building, are concerned, that separation has been
carried almost as far in Great Britain as in America,
and that every year it is proceeding further.

The revolutionary effects of the legislation which
begins with the Companies Act of 1 844 and the Act

PROPERTY AND CREATIVE WORK 75

establishing Limited Liability in 1855 have only
begun, in fact, fully to reveal themselves within
the last twenty years. Its consequence has
been to make the organization of English
industry in 1921 as different from that of the days
of Bright and Cobden as that of the latter was
from industry in the year 1800. They have caused
the whole philosophy of individualism, which was
based on the " individual initiative " of " the
employer," to be as remote from the realities of
the modern economic world as their noble interna-
tionalism is from its frenzied international politics.
Banking, in which, as the Treasury Committee
on Bank Amalgamations reported in 191 8, " the
number of private banks has fallen from 37 to 6
since 1891, and the number of English Joint-stock
banks from 106 to 34 during the same period,"
and which is, in effect the monopoly of an even
smaller number of firms than those figures would
suggest, railways, with their 300 directors, half a
million shareholders and over 600,000 employees, and
insurance, are given over altogether to corporate
enterprize. The 1452 mine-owners of the country,
apart from a few small firms producing an insigni-
ficant proportion of the total output, are limited
companies ; the capital of ^f 135,000,000 invested
in collieries in 1914 is the " property," and the
1,110,834 mine-workers the employees, of 37,316
(or, if industries allied with coal-mining be in-
cluded, 94,723) shareholders. In manufacturing
industry a firm like Vickers Ltd., with 60,000
shareholders, is still, no doubt, the exception.
But in all the more important industries, the
categories of " employer and employed " are by

76 THE ACQUISITIVE SOCIETY

now almost as archaic as those of master and
servant. The division of the industrial world
into absentee shareholders, directors, salaried mana-
gers, under-managers and technicians, and hired
wage-earners, is to-day in shipbuilding, engineering,
textiles, the manufacture of clothing, of boots and
shoes and of fifty other necessaries, not the excep-
tion, but the rule.

Every acceleration in the movement towards
combination, which has made such gigantic strides
in the last six years, necessarily accentuates still
further the separation between property rights and
constructive work, which is the essence of this
type of organization. The change is taking place
in our day most conspicuously, perhaps, through
the displacement in retail trade of the small shop-
keeper by the multiple store, and the substitution
in manufacturing industry of combines and amal-
gamations for separate businesses conducted by
competing employers. And, of course, it is not
only by economic development that such claims are
created. " Out of the eater came forth meat, and
out of the strong came forth sweetness." It is i
probable that war, which in barbarous ages used
to be blamed as destructive of property, has re-
cently created more titles to property than almost
all other causes put together. As between coun-
tries, the industry of the vanquished is subject
to a mortgage in favour of the victors, which, if
it is to be discharged in goods, may yield an
agreeable tribute, but will be a doubtful blessing
to those who live by labour. Within each country,
the annual output of wealth will be subject, except
in the case of repudiation or a capital levy, to a

PROPERTY AND CREATIVE WORK ']']

first charge in the shape of interest, amounting in
'' Great Britain " to some ^300,000,000, to be paid
to investors in war loans. In the absence of
countervaiHng measures, such as subsidies and
special taxation, the effect must be to produce a
considerable redistribution of wealth, to the preju-
dice of those who are dependent mainly on personal
work, and to the advantage of those whose main
source of income is the ownership of property.

Infinitely diverse as are these proprietary rights,
they have the common characteristic of being so
entirely separated from the actual objects over
which they are exercised, so rarified and generalized,
as to be analogous almost to a form of currency
rather than to the property which is so closely
united to its owner as to seem almost a part of
his personality. Their isolation from the rough
environment of economic life, where the material
objects of which they are the symbol are shaped
and handled, is their charm. ' It is also their danger.
The hold which a class has upon the future depends
on the function which it performs. What nature
demands is work ; few working aristocracies, how-
ever tyrannical, have fallen ; few functionless
aristocracies have survived. In society, as in the
world of organic life, atrophy is but one stage re-
moved from death. In proportion as the land-
owner becomes a mere rentier and industry is
conducted, not by the rude energy of the competing
employers who dominated its infancy, but by the
salaried servants of shareholders, the -argument for
private property which reposes on the impossibility
of finding any organization to supersede them loses
its application, for they are already superseded.

I

78 THE ACQUISITIVE SOCIETY

Whatever may be the justification of these types
of property, it cannot be that which was given for .
the property of the peasant or the craftsman. It
cannot be that they are necessary in order to
secure to each man the fruits of his own labour. For
if a legal right which gives ^^50,000 a year to a
mineral owner in the North of England and to a .
ground landlord in London " secures the fruits of
labour " at all, the fruits are the proprietor's and the
labour that of some one else. Property has no more
insidious enemies than those well-meaning anarch-
ists who, by defending all forms of it as equally
valid, involve the institution in the discredit attach-
ing to its extravagances. In reality, whatever
conclusion may be drawn from the fact, the greater
part of modern property belongs to the category of
property which is held, not for use or enjoyment,
but for acquisition or power. Sometimes, like
mineral rights and urban ground-rents, it is merely
a form of private taxation which the law allows
certain persons to levy on the industry of others ;
sometimes, like property in capital, it consists of
rights to payment for instruments which the
capitalist cannot himself use but puts at the dis-
posal of those who can. In either case, it has as its
essential feature that it confers upon its owners
income unaccompanied by personal service.

In this respect the ownership of land and the
ownership of capital are normally similar, though
from other points of view their differences are
important. To the economist rent and interest
are distinguished by the fact that the latter,
though it is often accompanied by surplus elements
which are merged with it in dividends, is the price

PROPERTY AND CREATIVE WORK 79

of an instrument of production which would not
be forthcoming for industry if the price were not
paid, while the former is a differential surplus
which does not affect the supply. To the business
community and the solicitor land and capital
are equally investments, between which, since they
possess the common characteristic of yielding in-
come without labour, it is inequitable to discrim-
inate. Though their significance as economic
categories may be different, their effect as social
institutions is the same. It is to separate property
from creative activity, and to divide society into
two classes, of which one has its primary interest in
passive ownership, while the other is mainly
dependent upon active work.

Hence the real analogy to many kinds of modern
property is not the simple property of the small
landowner or the craftsman, still less the household
gods and dear domestic amenities, which is what
the word suggests to the guileless minds of clerks
and shopkeepers, and which stampede them into
displaying the ferocity of terrified sheep when the
cry is raised that " Property " is threatened. It
is the feudal dues which robbed the French peasant
of part of his produce till the Revolution abolished
them. How do royalties differ from quintaines and
lods et ventes ? They are similar in their origin and
similar in being a tax levied on each increment of
wealth which labour produces. How do urban
ground-rents differ from the payments which
were made to English sinecurists before the Re-
form Bill of 1832 ? They are equally tribute
paid by those who work to those who do not. If

I he monopoly profits of the owner of banalit'es,

8o THE ACQUISITIVE SOCIETY

whose tenant must grind corn at Kis mill and make
wine at his press, were an intolerable oppression,
what is the sanctity attaching to the monopoly
profits of the capitalists, who, as the Report of the
Government Committee on trusts tells us, " in soap,
tobacco, wall-paper, salt, cement and in the textile
trades ... are in a position to control output
and prices," or, in other words, can compel the
consumer to buy from them, at the figure they
fix, on pain of not buying at all ?

AH these rights — royalties, ground-rents, mono-
poly profits, surpluses of all kinds — are " Property."
The criticism most fatal to them is not that of
Socialists. It is contained in the arguments by
which property is usually defended. The meaning
of the institution, it is said, is to encourage industry
by securing that the worker shall receive the pro-
duce of his toil. But then, precisely in proportion as
it is important to preserve the property which a man
has in the results of his own labour, is it important
to abolish that which he has in the results of the
labour of some one else. If the former " turns
sand into gold," the latter turns gold into sand ;
for it saps the motives for constructive effort. The
considerations which justify ownership as a function
are those which condemn it as a tax. Property is
not theft, but a good deal of theft becomes property.
The owner of royalties who, when asked why
he should be paid ^50,000 a year from minerals
which he has neither discovered nor developed nor
worked but only owned, replies " But it's Property 1"
may feel all the awe which his language suggests.
But in reality he is behaving like the snake which
sinks into its background by pretending that it

PROPERTY AND CREATIVE WORK 8i

is the dead branch of a tree, or the lunatic who tried
to catch rabbits by sitting behind a hedge and
making a noise Hke a turnip. He is practising
protective — and sometimes aggressive — mimicry.
His sentiments about property are those of the
simple toiler who fears that what he has sown
another may reap. His claim is to be allowed to
continue to reap what another has sown.

It is sometimes suggested that the less attractive
characteristics of our industrial civilization, its
combination of luxury and squalor, its class divi-
sions and class warfare, are accidental maladjust-
ments which are not rooted in the centre of its
being, but are excrescences which economic progress
itself may in time be expected to correct. That
agreeable optimism will not survive an examination
of the operation of the institution of private
property in land and capital in industrialized com-
munities. In countries where land is widely
distributed, in France or in Ireland, its effect may
be to produce a general diffusion of wealth among
a rural middle class who at once work and own. In
countries where the development of industrial
organization has separated the ownership of pro-
perty and the performance of work, the normal
effect of private property is to transfer to function-
less owners the surplus arising from the more valu-
able sites, the better machinery, the more elaborate
organization.

No clearer exemplification of the operation of
this " law of rent " has been given than the figures
supplied to the Coal Industry Commission by Sir
Arthur Lowes Dickenson, which showed that in a
fgiven quarter the costs per ton of producing coal

82 THE ACQUISITIVE SOCIETY

varied from 12s. 6d. to 48s. od. per ton, and the pro-
fits from nil to i6s. 6d. The distribution in dividends
to shareholders of the surplus accruing from the
working of richer and more accessible seams, from
special opportunities and access to markets, from
superior machinery, management and organization,
involves the establishment of Privilege as a national
institution, as much as the most arbitrary exac-
tions of a feudal seigneur. It is the foundation
of an inequality which is not accidental or tempor-
ary, but necessary and permanent. And on this
inequality is erected the whole apparatus of class
institutions, which make not only the income, but
the housing, education, health and manners, indeed
the very physical appearance, of different classes
of Englishmen almost as different from each other
as though the minority were alien settlers establish-
ed amid the rude civilization of a race of impoverish-
ed aborigines.

{c) Property and Security,

So the justification of private property tradi-
tional in England, which saw in it the security that
each man would enjoy the fruits of his own labour,
though largely applicable to the age in which it
was formulated, has undergone the fate of most
political theories. It has been refuted not by the
doctrines of rival philosophers, but by the prosaic
course of economic development. As far as the
mass of mankind are concerned, the need which
private property other than personal possessions
does still often satisfy, though imperfectly and
precariously, is the need for security. To the
small investors,^ who are the majority of property-

PROPERTY AND CREATIVE \^ORK 83

owners, though owning only an insignificant frac-
tion of the property in existence, its meaning is
simple. It is not wealth or power, or even leisure
from work. It is safety. They work hard. They
save a little money for old age, or for sickness, or
for their children. They invest it, and the interest
stands between them and all that they dread most.
Their savings are of convenience to industry, the
income from them is convenient to themselves.
" Why," they ask, " should we not reap in old age
the advantage of energy and thrift in youth ? "
And this hunger for security is so imperious that
those who suffer most from the abuses of property,
as well as those who, if they could profit by them,
would be least inclined to do so, will tolerate and
even defend them, for fear lest the knife which
trims dead matter should cut into the quick. They
have seen too many men drown to be critical of
dry land, though it be an inhospitable rock. They
are haunted by the nightmare of the future, and, if
a burglar broke it, would welcome a burglar.

This need for security is fundamental, and almost
the gravest indictment of our civilization is that
the mass of mankind are without it. Property is
one way of organizing it. It is quite comprehens-
ible therefore, that the instrument should be con-
fused with the end, and that any proposal to
modify it should create dismay. In the past,
human beings, roads, bridges and ferries, civil,
judicial and clerical offices, and commissions in
the army have all been private property. When-
ever it was proposed to abolish the rights exercised
over them, it was protested that their removal
would involve the destruction of an institution in

i

84 THE ACQUISITIVE SOCIETY

which thrifty men had invested their savings, and
on which they depended for protection amid the
chances of Hfe and for comfort in old age.

In fact, however, property is not the only method
of assuring the future, nor, when it is the way
selected, is security dependent upon the mainten-
ance of all the rights which are at present normally
involved in ownership. In so far as its psycholog-
ical foundation is the necessity for securing an
income which is stable and certain, which is forth-
coming when its recipient cannot work, and which
can be used to provide for those who cannot pro-
vide for themselves, what is really demanded is
not the command over the fluctuating proceeds of
some particular undertaking, which accompanies
the ownership of capital, but the security which
is offered by an annuity. Property is the instru-
ment, security is the object, and when some alter-
native way is forthcoming of providing the latter,
it does not appear in practice that any loss of
confidence, of freedom or of independence is caused
by the absence of the former.

Hence not only the manual workers, who since
the rise of capitalism, have rarely in England been
able to accumulate property sufficient to act as a
guarantee of income when their period of active
earning is past, but also the middle and profes-
sional classes, increasingly seek security to-day, not
in investment, but in insurance against sickness
and death, in the purchase of annuities, or in what
is in effect the same thing, the accumulation of part
of their salary towards a pension which is paid
when their salary ceases. The professional man
may buy shares in the hope of making a profit on

PROPERTY AND CREATIVE WORK 85

the transaction. But when what he desires to
buy is security, the form which his investment
takes is usually some kind of insurance. The
teacher, or nurse, or government servant looks
forward to a pension. Women, who fifty years
ago would have been regarded as dependent
almost as completely as if femininity were an in-
curable disease with which they had been born,
and whose fathers, unless rich men, would have
been tormented with anxiety for fear lest they
should not save sufficient to provide for them, now
receive an education, support themselves in pro-
fessions, and save in the same way.

The amount spent to-day on insurance alone is
the more remarkable in view of the comparatively
recent period, hardly more than two centuries,
within which this type of provision has developed.
The total annual expenditure in the United King-
dom on premiums is already over 3^50,000,000,
the amount insured some £1,200,000,000, and the
aggregate policies in force over 38,000,000. It is
true that a large number of these policies lapse, and
that, while the amount insured (almost entirely
by the well-to-do classes) in the " ordinary "
branch of insurance is some £870,000,000, the
working classes, with only £363,000,000 to their
credit in the " industrial " branch, are miserably
under-insured. Even to-day it is still the case
that almost all wage-earners outside government
employment, and many in it, as well as large
numbers of professional men, have nothing to fall
back upon in sickness or old age. But that does
not alter the fact that, when it is made, this type of
provision meets the need for security, which,

86 . THE ACQUISITIVE SOCIETY

apart, of course, from personal possessions and
household furniture, is the principal meaning of
property to by far the largest element in the popula-
tion, and that it meets it more completely and
certainly than property itself.

Nor, indeed, even when property is the instru-
ment used to provide for the future, is such pro-
vision dependent upon the maintenance in its
entirety of the whole body of rights which ac-
company ownership to-day. Property is not simple
but complex. That of a man who has invested his
savings as an ordinary shareholder comprises at least
three rights, the right to interest, the right to profits,
and (in legal theory) the right to control. In so far as
what is desired is the guarantee for the maintenance
of a stable income, not the acquisition of additional
wealth without labour — in so far as his motive is
not gain but security — the need is met by interest
on capital. It has no necessary connection either
with the right to residuary profits or the right to
control the management of the undertaking from
which the profits are derived, both of which are
vested to-day in the shareholder. If all that were
desired were to use property as an instrument for
purchasing security, the obvious course — from the
point of view of the investor desiring to insure his
future the safest course — would be to assimilate
his position as far as possible to that of a debenture
holder or mortgagee, who obtains the stable in-
come which is his motive for investment, but who
neither incurs the risks nor receives the profits of
the speculator.

The elaborate apparatus of proprietary rights
which distributes dividends of thirty per cent, to

■

PROPERTY AND CREATIVE WORK 87

the shareholders in Coats, and several thousands a
year to the owner of mineral royalties and ground-
rents, and then allows them to transmit the bulk of
gains which they have not earned to descendants
who in their turn will thus be relieved from the
necessity of earning, is property run mad. To insist
that it must be maintained for the sake of the widow
and the orphan, the vast majority of whom have
neither and would gladly part with them all for a safe
annuity if they had, is, to say the least of it, ex-
travagantly mal-a-propos. It is like pitching a man
into the water because he expresses a wish for a
bath, or presenting a tiger cub to a householder
who is plagued with mice, on the ground that tigers
and cats both belong to the genus felts. The tiger
hunts for itself not for its masters, and when game
is scarce will hunt them. The classes who own
little or no property may reverence it because it is
security. But the classes who own much prize it
or quite different reasons, and laugh in their
leeve at the innocence which supposes that
anything so vulgar as the savings of the petite
bourgeoisie have, except at elections, any interest
for them. They prize it because it is the order
which quarters them on the community and which
provides for the maintenance of a leisure class at
the public expense.

(d) The Tyranny of Functionless Property.
" Possession," said the Egoist, " without obliga-
ion to the object possessed, approaches felicity."
unctionless property appears natural to those
ho -believe that society should be organized for the
cquisition of private wealth, and attacks upon it
erverse or malicious, because the question which

88 THE ACQUISITIVE SOCIETY

such persons ask of any institution is, " What does it
yield ? " And such property yields much to
those who own it. Those, however, who hold that
social unity and effective work are possible only if
society is organized and wealth distributed on the
basis of function, will ask of an institution, not,
" What dividends does it pay ? " but " What
service does it perform ? " To them the fact that
much property yields income irrespective of any
service which is performed or obligation which is
recognized by its owners will appear, not a quality,
but a vice. They will see in the social confusion
which it produces, payments disproportionate
to service here, and payments without any service
at all there, and dissatisfaction everywhere, a con-
vincing confirmation of their argument that to
build on a foundation of rights and of rights alone
is to build on a quicksand.

From this portentous exaggeration into an ab-
solute of what once was, and still might be, a sane
and social institution most other evils follow. Its
fruits are the power of those who do not work
over those who do, the alternate subservience and
rebelliousness of those who work towards those who
do not, the starving of science and thought and
creative effort for fear that expenditure upon them
should impinge on the comfort of the sluggard and the
faineant^ and the arrangement of society in most of
its subsidiary activities to suit the convenience, not
of those who work usefully, but of those who spend
gaily ; so that the most hideous, desolate and par-
simonious places in the country are those in which
the greatest wealth is produced, the Clyde valley,
or the cotton towns of Lancashire, or the mining

PROPERTY AND CREATIVE WORK 89

villages of Scotland and Wales, and the gayest and
most luxurious those in which it is consumed.
From the point of view of social health and economic
efficiency, society should obtain its material equip-
ment at the cheapest price possible, and, after
providing for depreciation and expansion, should
distribute the whole product to its working members
and their dependents. What happens at present,
however, is that its workers are hired at the
cheapest price which the market (as modified by
organization) allows, and that the surplus, some-
what diminished by taxation, is distributed to the
owners of property.

Profits may vary in a given year from a loss to
100 per cent. But wages are fixed at a level
which will enable the marginal firm to continue
producing one year with another ; and the surplus,
even when due partly to efficient management,
goes neither to managers nor to manual workers,
but to shareholders. The meaning of the process be-
comes startlingly apparent when, as recently in Lan-
cashire, large blocks of capital change hands at a
period of abnormal activity. The existing share-
holders receive the equivalent of the capitalized
expectation of future profits. The workers, as
workers, do not participate in the immense in-
crement in value. And when, in the future, they
demand an advance in wages, they will be met
by the answer that profits, which before the
transaction would have been reckoned large, yield
shareholders after it only a low rate of interest
on their investment.

The truth is that, whereas in earlier ages the
protection of property was normally the protection

90 THE ACQUISITIVE SOCIETY

of work, the relationship between them has come
in the course of the economic development of the
last two centuries to be very nearly reversed. The
two elements which compose civilization are active
efforts and passive property, the labour of human
things and the tools which human beings use. Of
these two elements those who supply the first
maintain and improve it, those who own the second
normally dictate its character, its development
and its administration. Hence, though politically
free, the mass of mankind live in effect under rules
imposed to protect the interests of the small
section among them whose primary concern is
ownership. From this subordination of creative
activity to passive property, the worker who de-
pends upon his brains, the organizer, inventor,
teacher or doctor suffers almost as much embarrass-
ment as the craftsman. The real economic cleavage
is not, as is often said, between employers and
employed, but between all who do constructive
work, from scientist to labourer, on the one hand,
and all whose main interest is the preserva-
tion of existing proprietary rights upon the other,
irrespective of whether they contribute to con-
structive work or not.

If, therefore, under the modern conditions which
have concentrated any substantial share of property
in the hands of a small minority of the population,
the world is to be governed for the advantage of
those who own, it is only incidentally and by acci-
dent that the results will be agreeable to those who
work. In practice there is a constant collision
between them. Turned into another channel,
half the wealth distributed in dividends to function-

PROPERTY AND CREATIVE WORK 91

less shareholders, could secure every child a good
education up to 18, could re-endow English Uni-
versities, and (since more efficient production is
important) could equip English industries for more
efficient production. Half the ingenuity now
applied to the protection of property could have
made most industrial diseases as rare as smallpox,
and most EngUsh cities into places of health and
even of beauty. What stands in the way is the
doctrine that the rights of property are absolute,
irrespective of any social function which its owners
may perform. So the laws which are most string-
ently enforced are still the laws which protect pro-
perty, though the protection of property is no long-
er Hkely to be equivalent to the protection of work,
and the interests which govern industry and pre-
dominate in public affairs are proprietary interests.

A mill-owner may poison or mangle a generation
of operatives ; but his brother magistrates will let
him off with a caution or a nominal fine to poison
and mangle the next. For he is an owner of
property. A landowner may draw rents from
slums in which young children die at the rate of
200 per 1000 ; but he will be none the less welcome
in polite society. For property has no obligations
and therefore can do no wrong. Urban land may
be held from the market on the outskirts of cities
in which human beings are living three to a room,
and rural land may be used for sport when villagers
are leaving it to overcrowd them still more. No
public authority intervenes, for both are property.

Nor are these practical evils the gravest conse-
quences which flow from the hypertrophy of
property in an industrial society. Property is in

92 THE ACQUISITIVE SOCIETY

its nature a kind of limited sovereignty. Its
essence is a power, secured by the State to some
individual or group as against all others, to dispose
of the objects over which the proprietary rights
are exercised. When those objects are simple and
easily obtained, the property is normally harmless
or beneficial. When they are such that, while
they can be acquired only by the few, the mass of
mankind cannot live unless it has free access to
them, their proprietors, in prescribing their use,
may become the irresponsible governors of thou-
sands of other human beings.

Hence, when pushed to extremes, applied to
purposes for which it was not designed, and in an
environment to which it is not adapted, property
in things swells into something which is, in effect,
sovereignty over persons. " The main objection
to a large corporation," writes Mr. Justice Brandeis,
of the Supreme Court of the U.S.A., " is that it
makes possible — and in many cases makes inevit-
able— the exercise of industrial absolutism." In
England such absolutism is felt mainly in the hours
of work, above all in the power to deprive the
wage-earner of his livelihood by dismissing him
from his employment. In America there are cities
where the company owns not only the works, but
halls and meeting-places, streets and pavements,
where the town council and police are its nominees,
and the pulpit and press its mouthpieces, where
no meeting can be held to which it objects and no
citizen can dwell of whom it disapproves.* Such

*See the Report on the Steel Sttike of 19 19, by the Commission
of Inquiry of the Inter-church World Movement, W. Z. Foster,
The Great Steel Strike, and the Final Report of the United States
Commission on Industrial Relations.

PROPERTY AND CREATIVE WORK 93

property confers a private franchise or jurisdiction
analagous to that which in some periods has been
associated with the ownership of land. The men
who endure it may possess as citizens the right to
" life, liberty, and the pursuit of happiness." But
they live, in effect, at the will of a lord.

To those who believe that institutions which
repudiate all moral significance must sooner or
later collapse, a society which confuses the protection
of property with the preservation of its functionless
perversions will appear as precarious as that which
has left the memorials of its tasteless frivolity and
more tasteless ostentation in the gardens of Ver-
sailles. Do men love peace ? They will see the great-
est enemy of social unity in rights which involve no
obligation to co-operate for the service of society.
Do they value equality ? Property rights which
dispense their owners from the common human
necessity of labour make inequality an institution
permeating every corner of society, from the
distribution of material wealth to the training of
intellect itself. Do they desire greater industrial
efficiency ? There is no more fatal obstacle to
efficiency than the revelation that idleness has the
same privileges as industry, and that for every
additional blow with the pick or hammer an
additional profit will be distributed among share-
holders who wield neither.

Indeed, functionless property is the greatest
enemy of legitimate property itself. It is the
parasite which kills the organism that produced it.
Bad money drives out good, and, as the history
of the last two hundred years shows, when property
for acquisition or power and property for service

I

94 THE ACQUISITIVE SOCIETY

or for use jostle each other freely in the market,
without restrictions such as some legal systems have
imposed on alienation and inheritance, the latter
tends normally to be absorbed by the former, be-
cause it has less resisting power. Thus functionless
property grows, and as it grows it undermines the
creative energy which produced the institution of
property and which in earHer ages property pro-
tected. It cannot unite men, for what unites
them is the bond of service to a common purpose,
and that bond it repudiates, since its very essence
is the maintenance of rights irrespective of service.
It cannot create ; it can only spend, so that the
number of scientists, inventors, artists or men of
letters who have sprung in the course of the last
century from hereditary riches can be numbered
on one hand. It values neither culture nor beauty,
but only the power which belongs to wealth and
the ostentation which is the symbol of it.

So those who dread these qualities, energy and
thought and the creative spirit — and they are many
— will not discriminate, as we have tried to dis-
criminate, between different types and kinds of
property, in order that they may preserve those
which are legitimate and aboKsh those which are
not. They will endeavour to preserve all private
property, even in its most degenerate forms. And
those who value those things will try to promote
them by relieving property of its perversions,
and thus enabling it to return to its true nature.

They will not desire to establish any visionary
communism, for they will reaHze that the free
disposal of a sufficiency of personal possessions is
the condition of a healthy and self-respecting life,

PROPERTY AND CREATIVE WORK 95

and will seek to distribute more widely the property
rights which make them to-day the privilege of a
minority. But they will refuse to submit to the
naive philosophy which would treat all proprietary
rights as equal in sanctity merely because they are
identical in name. They will distinguish sharply
between property which is used by its owner for
the conduct of his profession or the upkeep of his
household, and property which is merely a claim
on wealth produced by another's labour. They
will insist that property is moral and healthy only
when it is used as a condition, not of idleness, but
of activity, and when it involves the discharge of
definite personal obHgations. They will endeavour
in short, to base it upon the principle of function.

VI

THE FUNCTIONAL SOCIETY.

The application to property and industry of the
principle of function is compatible with several
different types of social organization, and is as un-
likely as more important revelations to be the
secret of those who cry " Lo here ! " and " Lo
there ! " What it means, in effect, is that society
should be organized primarily for the performance
of duties, not for the maintenance of rights, and
that the rights which it protects should be those
which are necessary to the discharge of social
obligations. But duties, unlike rights, are relative
to some end or purpose, for the sake of which they
are imposed. The latter are a principle of division ;
they enable men to resist. The former are a
principle of union ; they lead men to co-operate.
The essential thing, therefore, is that men should
fix their minds upon the idea of purpose, and give
that idea pre-eminence over all subsidiary issues.
If, as is patent, the purpose of industry is to
provide the material foundations of a good social
life, then any measure which makes that provision
more effective, so long as it does not conflict with
some still more important purpose, is wise, and
any institution which thwarts or encumbers it is
foolish. It is foolish, for example, to maintain
property rights for which no service is performed,
for payment without service is waste ; and if it

96

THE FUNCTIONAL SOCIETY 97

is true, as statisticians affirm, that, even were
income equally divided, income per head would
be small, then it is all the more foolish. Sailors
in a boat have no room for first-class passengers,
and, the smaller the total national income, the
more important is it that none of it should be
misapplied. It is foolish to leave the direction of
industry in the hands of the servants of private
property-owners, who themselves know nothing
about it but its balance sheets, because this is to
divert it from the performance of service to the
acquisition of gain, and to subordinate those who
do creative work to those who do not.

It is foolish, above all, to cripple education, as it
is crippled in England for the sake of industry ; for
one of the uses of industry is to provide the wealth
which may make possible better education. If
a society with the sense to keep means and ends
in their proper places did no more than secure the
investment in the education of children of a fraction
of the wealth which to-day is applied to the pro-
duction of futilities, it would do more for posterity —
it would in a strictly economic sense, " save " more
" capital " — than the most parsimonious of com-
munities which ever lived with its eyes on the Stock
Exchange. To one who thinks calmly over the
recent experience of mankind there is something
almost unbearable in the reflection that hitherto,
outside a small circle of fortunate families, each
generation, as its faculties began to flower, has
been shovelled like raw material into an economic
mill, to be pounded and ground and kneaded into
the malleable human pulp out of which national
prosperity and power, all the kingdoms of the

I

98 THE ACQUISITIVE SOCIETY

world and the glory of them, are supposed to be
manufactured. In England a new race of nearly
900,000 souls bursts upon us every year ; and if,
instead of rejuvenating the world, they grind corn
for the Philistines and doff bobbins for mill-owners,
the responsibility is ours into whose hands the
prodigality of nature pours Hfe itself, and who let
it slip aimlessly through the fingers that close so
greedily on material riches.
^ The course of wisdom in the affairs of industry is,
after all, what it is in any other department of
organized life. It is to consider the end for which
economic activity is carried on and then to adapt
economic organization to it. It is to pay for service
and for service only, and when capital is hired to
make sure that it is hired at the cheapest possible
price. It is to place the responsibiHty for organ-
izing industry on the shoulders of those who work
and use, not of those who own, because production
is the business of the producer and the proper
person to see that he discharges his business is the
consumer, for whom, and not for the owner of
property, it ought to be carried on. Above all
it is to insist that all industries shall be conducted
in complete publicity as to costs and profits, be-
cause publicity ought to be the antiseptic both of
economic and political abuses, and no man can have
confidence in his neighbour unless both work
in the light.

As far as property is concerned, such a policy
would possess two edges. On the one hand, it
would aim at abolishing those forms of property
in which ownership is divorced from obligations.

THE FUNCTIONAL SOCIETY

99

On the other hand, it would seek to encourage
those forms of economic organization under which
the worker, whether owner or not, is free to carry
on his work without sharing its control or its
profits with the mere rentier. Thus, if in certain
spheres it involved an extension of public owner-
ship, it would in others foster an extension of private
property. For it is not private ownership, but
private ownership divorced from work, which is
corrupting to the principle of industry ; and the
idea of some socialists that private property in
land or capital is necessarily mischievous is a piece
of scholastic pedantry as absurd as that of those
conservatives who would invest all property with
some kind of mysterious sanctity. It all depends
what sort of property it is and for what purpose it
is used. The State can retain its eminent domain,
and control alienation, as it does under the Home-
stead laws of the Dominions, with sufficient
stringency to prevent the creation of a class of
functionless property-owners. In that case there is
no inconsistency between encouraging simul-
taneously a multiplication of peasant farmers and
small masters who own their own farms or shops,
and the abolition of private ownership in those
industries, unfortunately to-day the most con-
spicuous, in which the private owner is an absentee
shareholder.

Indeed, the second reform would help the first.
In so far as the community tolerates functionless
property, it makes difficult, if not impossible, the
restoration of the small master in agriculture or in
industry, who cannot easily hold his own in a world
dominated by great estates or capitalist finance.

I

loo THE ACQUISITIVE SOCIETY

In so far as it abolishes those kinds of property
which are merely parasitic, it facilitates the re-
storation of the small property-owners in those
kinds of industry for which small ownership is
adapted. A socialistic policy towards the former
is not antagonistic to the " distributive state,"
but, in modern economic conditions, a necessary
preliminary to it ; and if by " Property " is meant
the personal possessions which the word suggests
to nine-tenths of the population, the object of
socialists is not to undermine property but to pro-
tect and increase it.

The boundary between large scale and small
scale production will always be uncertain and
fluctuating, depending, as it does, on technical
conditions which cannot be foreseen : a cheapening
of electrical power, for example, might result in
the decentralization of manufactures, as steam
resulted in their concentration. The fundamental
issue, however, is not between different scales of
ownership, but between ownership of different
kinds, not between the large farmer or master and
the small, but between property which is used for
work and property which yields income without
it. The Irish landlord was abolished, not because
he owned upon a large scale, but because he was an
owner and nothing more ; if and when English
landownership has been equally attenuated, as
in towns it already has been, it will deserve to meet
the same fate. Once the issue of the character of
ownership has been settled, the question of the
size of the economic unit can be left to settle itself.

The first step, then, towards the organization of
economic life for the performance of function is to

THE FUNCTIONAL SOCIETY loi

abolish those types of private property in return for
which no function is performed. The man who
lives by owning without working is necessarily
supported by the industry of some one else, and is,
therefore, too expensive a luxury to be encouraged.
Though he deserves to be treated with the leniency
which ought to be, and usually is not, shown to
those who have been brought up from infancy to
any other disreputable trade, indulgence to in-
dividuals must not condone the institution of which
both they and their neighbours are the victims.
Judged by this standard, certain kinds of property
are obviously anti-social. The rights in virtue of
which the owner of land is entitled to levy
a tax, called a royalty, on every ton of coal which
the miner brings to the surface, to levy another
tax, called a way-leave, on every ton of coal trans-
ported under the surface of his land though its
amenity and value may be quite unaffected, to
distort, if he pleases, the development of a whole
district by refusing access to the minerals except
upon his own terms, and to cause some 3,500 to
4,000 million tons to be wasted in barriers between
different properties, while he in the meantime con-
tributes to a chorus of lamentations over the
wickedness of the miners in not producing more
tons of coal for the public and incidentally more
private taxes for himself — all this adds an agreeable
touch of humour to the drab quality of our in-
dustrial civilization, for which mineral owners
deserve, perhaps, some recognition, but not the
j^i 00,000 a year odd which is paid to each of the
four leading players, or the £6,000,000 a year which
is^ distributed among the crowd.

I

102 THE ACQUISITIVE SOCIETY

The alchemy by which a gentleman who has
never seen a coal mine distills the contents of that
place of gloom into elegant chambers in London
and a house in the country is not the monopoly of
royalty owners. A similar feat of presdigitation
is performed by the owner of urban ground-rents.
In rural districts some landlords, perhaps many
landlords, are partners in the hazardous and diffi-
cult business of agriculture, and, though they may
often exercise a power which is socially excessive,
the position which they hold and the income which
they receive are, in part at least, a return for the
functions which they perform. The ownership of
urban land has been refined till of that crude ore
only the pure gold is left. It is the perfect sinecure,
for the only function it involves is that of collecting
its rents, and in an age when the struggle of Liberal-
ism against sinecures was still sufficiently recent
to stir some chords of memory, the last and the
greatest of liberal thinkers drew the obvious de-
duction. " The reasons which form the justifica-
tion ... of property in land," wrote Mill in
1848, " are valid only in so far as the proprietor
of land is its improver. ... In no sound
theory of private property was it ever contemplated
that the proprietor of land should be merely a
sinecurist quartered on it."

Urban ground-rents and royalties are, in fact, as
the Prime Minister in his unregenerate days
suggested, a tax which some persons are permitted
by the law to levy upon the industry of others.
They differ from public taxation only in that their
amount increases in proportion, not to the nation's
need of revenue, but to its need of the coal and

THE FUNCTIONAL SOCIETY 103

space on which they are levied, that their growth
inures to private gain not to public benefit, and
that, if the proceeds are wasted on frivolous ex-
penditure, no one has any right to complain, be-
cause the arrangement by which Lord Smithson
spends the wealth produced by Mr. Brown on
objects which do no good to either is part of the
system which, under the name of private property,
Mr. Brown as well as Lord Smithson have been
taught to regard as essential to the higher welfare
of mankind.

But if we accept the principle of function we
shall ask what is the purpose of this arrangement,
and for what end the inhabitants of, for example,
London pay ,^16,000,000 a year to their ground
landlords. And if we find that it is for no purpose
and no end, but that these things are like the horse-
shoes and nails which the City of London presents
to the Crown on account of land in the Parish of
St. Clement Danes, then we shall not deal harshly
with a quaint historical survival, but neither shall
we allow it to distract us from the business of the
present, as though there had been history but there
were not history any longer. We shall close these
channels through which wealth leaks away by re-
suming the ownership of minerals and of urban
land, as some communities in the British Domin-
ions and on the Continent of Europe have resumed
it already. We shall secure that such large ac-
cumulations as remain change hands at least once
in every generation, by increasing our taxes on
inheritance till what passes to the heir is little
more than personal possessions, not the right to a
tribute from industry which, though qualified by

I

104 THE ACQUISITIVE SOCIETY

death-duties, is what the son of a rich man inherits
to-day. We shall, in short, treat mineral owners
and absentee landowners as Plato would have
treated the poets, whom, in their ability to make
something out of nothing and to bewitch mankind
with words, they a Httle resemble, and crown them
with flowers and usher them politely out of the
State.

VII

THE LIBERATION OF INDUSTRY.

Rights without functions are like the shades in

Homer, which drank blood but scattered trembling

at the voice of a man. To extinguish royalties

and urban ground-rents is merely to explode a

superstition. It needs as little — and as much —

resolution as to put one's hand through any other

ghost. In all industries except the diminishing

number in which the capitalist is himself the

manager, property in capital is almost equally

passive.

Almost, but not quite. For, though the majority

of its owners do not themselves exercise any positive

function, they appoint those who do. It is true, of

course, that the question of how capital is to be

owned is distinct from the question of how it is to

be administered, and that the former can be settled

without prejudice to the latter. Shareholders own

capital which is indispensable to industry, but it

does not therefore follow that industry is dependent

upon the maintenance of capital in the hands of

shareholders. To write, with some economists, as

though, if private property in capital were further

attenuated or abolished altogether, the constructive

energy of the managers who may own capital or

may not, but who rarely, in the more important

industries, own more than a small fraction of it, must

necessarilv be impaired, is to be guilty of a robust

105

io6 THE ACQUISITIVE SOCIETY

non-sequitur and to ignore the most obvious facts
of contemporary industry. The less the mere
capitaHst talks about the necessity for the consumer
of an efficient organization of industry, the better ;
for, whatever the future of industry may be, an
efficient organization is likely to have no room for
him. But though shareholders do not govern, they
reign, at least to the extent of saying once a year
** le toy le veultP If their rights are pared down or
extinguished, the necessity for some organ to
exercise them will still remain. And the question
of the ownership of capital has this much in com-
mon with the question of industrial organization,
that the problem of the constitution under which
industry is to be conducted is common to both.

(^) Industry as a Profession,

That constitution must be sought by considering
how industry can be organized to express most
perfectly the principle of purpose. The application
to industry of the principle of purpose is simple,,
however difficult it may be to give effect to it. It
is to turn it into a Profession. A Profession may
be defined most simply as a trade which is organized,
incompletely, no doubt, but genuinely, for the per-
formance of function. It is not simply a collection
of individuals who get a living for themselves by the
same kind of work. Nor is it merely a group which
is organized exclusively for the economic protection
of its members, though that is normally among
its purposes. It is a body of men who carry on their^
work in accordance with rules designed to enforce
certain standards both for the better protection of
its members and for the better service of the public.

THE LIBERATION OF INDUSTRY 107

The standard which it maintains may be high or
low : all professions have some rules which protect
the interests of the community and others which
are an imposition on it. Its essence is that it
assumes certain responsibilities for the competence
of its members or the quality of its wares, and that
it deliberately prohibits certain kinds of conduct on
the ground that, though they may be profitable to
the individual, they are calculated to bring into
disrepute the organization to which he belongs.
While some of its rules are trade union regulations
designed primarily to prevent the economic stand-
ards of the profession being lowered by unscrupulous
competition, others have as their main object to
secure that no member of the profession shall have
any but a purely professional interest in his work,
by excluding the incentive of speculative profit.
Business men may cajole the public from every
hoarding. But doctors, architects, consulting en-
gineers, and even lawyers are prohibited by their
professional associations from advertising, from
having any pecuniary interest in the treatment or
course of action recommended to their clients, or
from receiving commissions. The fees which the
more eminent among them charge for their pro-
fessional services may often be excessive. But
they may charge for professional services and
for nothing else.

The conception implied in the words " unpro-
fessional conduct " is, therefore, the exact opposite
of the theory and practice which assume that the
service of the public is best secured by the unrestric-
ted pursuit on the part of rival traders of their
pecuniary self-interest, within such Umits as the

io8 THE ACQUISITIVE SOCIETY

law allows. It is significant that at the time when
the professional classes had deified free competition
as the arbiter of commerce and industry, they did
not dream of applying it to the occupations in which
they themselves were primarily interested, but
maintained, and indeed, elaborated, machinery
through which a professional conscience might find
expression. The rules themselves may sometimes
appear to the layman arbitrary and ill-conceived.
But their object is clear. It is to impose on the
profession itself the obligation of maintaining the
quality of the service, and to prevent its common
purpose being frustrated through the undue influ-
ence of the motive of pecuniary gain upon the
necessities or cupidity of the individual.

The difference between industry as it exists to-
day and a profession is, then, simple and unmis-
takable. The former is organized for the pro-
tection of rights, mainly rights to pecuniary gain,
The latter is organized, imperfectly indeed, but none
the less genuinely, for the performance of duties.
The essence of the one is that its only criterion is the
financial return which it offers to its shareholders.
The essence of the other, is that, though men enter it
for the sake of livelihood, the measures of their
success is the service which they perform, not the
gains which they amass. They may, as in the case
of a successful doctor, grow rich ; but the meaning
of their profession, both for themselves and for the
public, is not that they make money but that they
make health, or safety, or knowledge, or good
government or good law. They depend on it for
their income, but they do not consider that any
conduct which increases their income is on that

THE LIBERATION OF INDUSTRY 109

account right. And while a boot-manufacturer
who retires with half a million is counted to have
achieved success, whether the boots which he
made were of leather or brown paper, a civil
servant who did the same would, very properly,
be prosecuted.

So, if men are doctors, they recognize that there
are certain kinds of conduct which cannot be
practised, however large the fee offered for them,
because they are unprofessional ; if scholars and
teachers, that it is wrong to make money by de-
Hberately deceiving the public, as is done by makers
of patent medicines, however much the public may
clamour to be deceived ; if judges or public servants,
that they must not increase their incomes by
selling justice for money ; if soldiers, that the
service comes first, and their private incHnations,
even the reasonable preference of life to death,
second. Every country has its traitors, every
army its deserters, and every profession its black-
legs. To idealize the professional spirit would be
very absurd ; is has its sordid side, and, if it is to
be fostered in industry, safeguards will be needed to
check its excesses. Clearly, a profession should not
have the final voice in deciding the charge to be
made for its services. It ought not by itself
to determine the conditions on which new members
are to be admitted. It should not have so ex-
clusive a control even of its own technique as to be
in a position to meet proposals for improvement
with the determined obstructiveness which the
legal profession has offered, for example, to the
registration of land. But there is all the difference
between maintaining a standard which is occasion-

no THE ACQUISITIVE SOCIETY

ally abandoned, and affirming as the central truth
of existence that there is no standard to maintain.
The meaning of a profession is that it makes the
traitors the exception, not, as they tend to be in
industry, the rule. It makes them the exception by
upholding as the criterion of success the end for
which the profession, whatever it may be, is carried
on, and subordinating the inclinations, appetites
and ambitions of individuals to the rules of an
organization which has as its object to promote the
performance of function.

There is no sharp line between the professions and
the industries. A hundred years ago the trade of
teaching, which to-day is on the whole an honourable
public service, was rather a vulgar speculation upon
public credulity ; if Mr. Squeers was a caricature,
the Oxford of Gibbon and Adam Smith was a solid
port-fed reality ; no local authority could have
performed one-tenth of the duties which are
carried out by a modern municipal corporation
every day, because there was no body of public
servants to perform them, and such as there were
took bribes. It is conceivable, at least, that some
branches of medicine might have developed on the
lines of industrial capitalism, with hospitals as
factories, doctors hired at competitive wages as
their " hands," large dividends paid to share-
holders by catering for the rich, and the poor, who
do not offer a profitable market, supplied with an
inferior service or with no service at all.

The idea that there is some mysterious difference^
between making munitions of war and firing them,,
between building schools and teaching in them-
when built, between providing food and providing

THE LIBERATION OF INDUSTRY lu

health, which makes it at once inevitable and
laudable that the former should be carried on with a
single eye to pecuniary gain, while the latter are con-
ducted by professional men, who expect to be paid
for their services, but who neither watch for wind-
falls nor raise their fees merely because there are
more sick to be cured, more children to be taught, or
more enemies to be resisted, is an illusion only less
astonishing than that the leaders of industry should
welcome the insult as an honour and wear their
humiliation as a kind of halo. The work of making
boots or building a house is in itself no more de-
grading than that of curing the sick or teaching the
ignorant. It is as necessary and therefore as
honourable. It should be at least equally bound
by rules which have as their object to maintain the
standards of professional service. It should be at
least equally free from the vulgar subordination of
moral standards to financial interests.

If industry is to be organized as a profession, two
changes are requisite, one negative and one positive.
The first, is that it should cease to be conducted by
the agents of property-owners for the advantage of
property-owners, and should be carried on, instead,
for the service of the public. The second, is that,
subject to rigorous public supervision, the respon-
sibility for the maintenance of the service should
rest upon the shoulders of those, from organizer
and scientist to labourer, by whom, in effect, the
work is conducted.

The first change is necessary because the conduct
of industry for the public advantage is impossible
as long as the ultimate authority over its manage-
ment is vested in those whose only connection with

112 THE ACQUISITIVE SOCIETY

it, and interest in it, is the pursuit of gain. As
industry is at present organized, its profits and its
control belong by law to that element in it which
has least to do with its success. Under the joint-
stock organization which has become normal in all
the more important industries except agriculture and
building, it is managed by the salaried agents of
those by whom the property is owned. It is success-
ful if it returns large sums to shareholders, and
unsuccessful if it does not. If an opportunity
presents itself to increase dividends by practices
which deteriorate the service or degrade the workers,
the officials who administer industry act strictly
within their duty if they seize it, for they are the
servants of their employers, and their obhgation to
their employers is to provide dividends not to
provide service. But the owners of property are,
qua property-owners, functionless, not in the sense,
of course, that the tools of which they are the pro-
prietors are not useful, but in the sense that since
work and ownership are increasingly separated, the
efficient use of the tools is not dependent on the
maintenance of the proprietary rights exercised
over them. Of course there are many managing
directors who both own capital and administer the
business. But it is none the less the case that most
shareholders in most large industries are normally
shareholders and nothing more.

Nor is their economic interest identical, as is
sometimes assumed, with that of the general
public. A society is rich when material goods,
including capital, are cheap, and human beings
dear ; indeed the word " riches " has no other
meaning. The interest of those who own the

THE LIBERATION OF INDUSTRY 113

property used in industry, though not, of course,
of the managers who administer industry and who
themselves are servants, and often very ill-paid
servants at that, is that their capital should be dear
and human beings cheap. Hence, if the industry
is such as to yield a considerable return, or if one
unit in the industry, owing to some special advan-
tage, produces more cheaply than its neighbours,
while selling at the same price, or if a revival of
trade raises prices, or if suppHes are controlled by
one of the combines which are now the rule in
many of the more important industries, the re-
sulting surplus normally passes neither to the
managers, nor to the other employees, nor to the
pubhc, but to the shareholders.

Such an arrangement is preposterous in the
Hteral sense of being the reverse of that which
would be established by considerations of equity
and common sense, and gives rise (among other
anomalies) to what is called " the struggle between
labour and capital." The phrase is apposite, since
it is as absurd as the relations of which it is intended
to be a description. To deplore " ill-feeling ", or to
advocate "harmony", between "labour and capital"
is as rational as to lament the bitterness between
carpenters and hammers or to promote a mission
for restoring amity between mankind and its boots.
The only significance of these cliches is that their
repetition tends to muffle their inanity, even to
the point of persuading sensible men that capital
" employs " labour, much as our pagan ancestors
imagined that the pieces of wood and iron,
which they deified in their day, sent their crops and
won their battles. When men have gone so far as

114 THE ACQUISITIVE SOCIETY

to talk as though their idols have come to life, it is
time that some one broke them. Labour consists
of persons, capital of things. The only use of
things is to be applied to the service of persons.
The business of persons is to see that they are there
to use, and that no more than need be is paid for
using them.

Thus the application to industry of the principle
of function involves an alteration of proprietary
rights, because those rights do not contribute, as
they now are, to the end which industry exists to
serve. What gives unity to any activity, what alone
can reconcile the conflicting claims of the different
groups engaged in it, is the purpose for which it is
carried on. If men have no common goal it is no
wonder that they should fall out by the way,
nor are they likely to be reconciled by a redistribu-
tion of their provisions. If they are not content
both to be servants, one or the other must be
master, and it is idle to suppose that mastership
can be held in a state of suspense between the two.
There can be a division of functions between
different grades of workers, or between worker
and consumer, because each, without prejudice to
the other, can have in his own sphere the
authority needed to enable him to fill it. But
there cannot be a division of functions between
the worker and the owner who is owner and nothing
else, for what function does such an owner perform ?
The provision of capital ? Then pay him the sum
needed to secure the use of his capital, but
neither pay him more nor admit him to a position
of authority over production for which, merely as
an owner, he is not qualified. For this reason,

THE LIBERATION OF INDUSTRY 115

while an equilibrium between worker and manager
is possible, because both are workers, that which
it is sought to establish between workers and owners
is not. It is like the offer which the Germans made
to negotiate with Belgium from Brussels. Their
proposals may be excellent : but it is not evident
why they are where they are, or how, since they
do not contribute to production, they come to be
putting forward proposals at all. As long as they
are in territory where they have no business to be,
their excellence as individuals will be overlooked
in resentment at the system which puts them in a
position of authority.

It is fortunate indeed, if nothing worse than this
happens. For one way of solving the problem of
the conflict of rights in industry is not to base
rights on functions, as we propose, but to base them
on force. It is to re-estabHsh in some veiled and
decorous form the institution of slavery, by making
labour compulsory. In nearly all countries a
concerted refusal to work has been made at one
time or another a criminal offence. There are
to-day parts of the British Empire, as well as of
the world outside it, in which European capitalists,
unchecked by any public opinion or authority
independent of themselves, are free to impose
almost what terms they please upon workmen of
ignorant and helpless races. In those districts of
America where capitalism still retains its primitive
lawlessness, the same result appears to be produced
upon immigrant workmen by the threat of vio-
lence.

In such circumstances the conflict of rights
which finds expression in industrial warfare does

ii6 THE ACQUISITIVE SOCIETY

not arise, because the rights of one party have been
extinguished. The simpHcity of the remedy is so
attractive that it is not surprising that the Govern-
ments of industrial nations should coquet from
time to time with the policy of compulsory arbi-
tration. After all, it is pleaded, it is only analogous
to the action of a supernational authority which
should use its common force to prevent the out-
break of war. In reahty, compulsory arbitration
is the opposite of any policy which such an authority
could pursue either with justice or with hope of
success. For it takes for granted the stability of
existing relationships, and intervenes to adjust
incidental disputes upon the assumption that their
equity is recognized and their permanence desired.
In industry, however, the equity of existing re-
lationships is precisely the point at issue. A
League of Nations which settled the quarrel between
a subject race and its oppressors, between Slavs
and Magyars, or the inhabitants of what was once
Prussian Poland and the Prussian Government, on
the assumption that the subordination of Slav to
Magyars and Poles to Prussians was part of an
unchangeable order, would rightly be resisted by
all those who think liberty more precious than
peace. A State which, in the name of peace,
should make the concerted cessation of work a
legal offence, would be guilty of a similar betrayal
of freedom. It would be solving the conflict of
rights between those who own and those who work
by abolishing the rights of those who work.

(b) The extinction of the Capitalist.
So here again, unless we are prepared to re-

THE LIBERATION OF INDUSTRY 117

establish some form of forced labour, we reach an
impasse. But it is an impasse only in so long as
we regard the proprietary rights of those who own
the capital used in industry as absolute and an
end in themselves. If, instead of assuming that
aU property, merely because it is property, is equ-
ally sacred, we ask what is the purpose for which
capital is used, what is its function, we shall realize
that it is not an end but a means to an end, and
that its function is to serve and assist (as the
economists tell us) the labour of human beings, not
the function of human beings to serve those who
happen to own it.

And from this truism two consequences follow.
The first is that since capital is a thing, which
ought to be used to help industry as a man may use
a bicycle to get more quickly to his work, it ought,
when it is employed, to be employed on the cheapest
terms possible. The second is that those who own
it should no more control production than a man
who lets a house controls the meals which shall be
cooked in the kitchen, or a man who lets a boat the
speed at which the rowers shall pull. In other
words, capital should always be got at cost price,
which means, unless public bodies find it wise, as
they very well may, to own the capital used in
certain industries, it should be paid the lowest
interest for which it can be obtained, but should
carry no right either to residuary dividends or to
the control of industry.

There are, in theory, six ways by which the
control of industry by the agents of private
property-owners can be terminated. The owners may
be expropriated without compensation. They may

I.

ii8 THE ACQUISITIVE SOCIETY

voluntarily surrender it. They may be frozen out
by action on the part of the working personnel^
which itself undertakes such functions, if any, as
they have performed, and makes them super-
fluous by conducting production without their
assistance. Their place may be taken by associa-
tions of consumers which supply themselves, and
which vest both the ultimate control and the
residuary profits in those who use the service
or purchase the goods. Their proprietary interest
may be limited or attenuated to such a
degree that they become mere rentiers^ who
are guaranteed a fixed payment analogous
to that of the debenture-holder, but who
receive no profits and bear no responsibility
for the organization of industry. They may,
finally, be bought out.

The first alternative is exemplified by the
historical confiscations of the past, such as, for
instance, the seizure of ecclesiastical property by
the ruling classes of England, Scotland and most
other Protestant states. The second has rarely, if
ever, been tried — the nearest approach to it,
perhaps, was the famous abdication of August 4th,
1789. The third is the method apparently con-
templated by the building guilds which are now
in process of formation in Great Britian. The
fourth method of treating the capitalist is followed
by the co-operative movement. The fifth is that re-
commended by the committee of employers and
trade-unionists in the building industry over which
Mr. Foster presided, and which proposed that em-
ployers should be paid a fixed salary and a fixed rate
of interest on theircapital, but that all surplus profits

THE LIBERATION OF INDUSTRY 119

should be pooled and administered by a central
body representing employers and workers. The
sixth has repeatedly been practised by municipal-
ities, and somewhat less often by national govern-
ments.

Which of these alternative methods of removing
industry from the control of the property-owner is
adopted is a matter of expediency to be decided in
each particular case. " Nationalization," there-
fore, which is sometimes advanced as the only
method of extinguishing proprietary rights, is
merely one species of a considerable genus. It can
be used, of course, to produce the desired result.
But it is a means to an end, not an end in itself.
Properly conceived, its object is not to establish
the State management of industry, but to remove the
dead hand of private ownership, when the private
owner has ceased to perform any positive function.
It is unfortunate, therefore, that the abolition of
obstructive property rights, which is indispensable,
should have been identified with a single formula,
which may be applied with advantage in the
special circumstances of some industries, but need
not necessarily be appHed to all.

While the most elaborate scheme for the admin-
istration of a nationalized industry advanced
within recent years has come from the Miners'
Federation, the clearest example of a practical
alternative to nationalization has been supplied
by the Building Trades. The Building Industry,
which, till a few years ago, was not specially noted
for intellectual activity, has produced since the
Armistice two plans of reconstruction, neither of
which owes anything to traditional discussions of

I

120 THE ACQUISITIVE SOCIETY

nationalization, but both of which, though in
different degrees, involve a complete breach with
private ownership as hitherto understood. The
first, that of the building guilds, gets rid of the
capitalist employer in the simplest possible way.
It walks round him. The capital equipment re-
quired for building houses is relatively small.
Unlike mining or factory industry, there is in
building no fixed establishment within which
alone operations can be carried on. Since it is
largely a locahzed industry working for a market
in its immediate neighbourhood, the productive
work of the craftsman is not overshadowed by an
elaborate commercial organization. The provision
of decent houses has notoriously been the field in
which, even before the war, alike in quantity and
quality, the failure of capitalist industry was at
once most disastrous and least excusable.

The Manchester Building Guild Committee, with
the 57 building Committees which have sprung
from it in different parts of the country, and the
London Guild of Builders have taken advantage of
these simple facts, not to expropriate the employer,
but to supersede him. As long as each group of
workers necessary to the building of a house insists
on acting in isolation, a business man may be
needed to bring them together. If the whole
profession unites, it can serve the public direct,
without his mediation. The aim of the guilds is
not profit, but the provision of good houses at a
reasonable price, on terms compatible with the
dignity of the workers. Their argument is that
these two things are really one, that the system
which treats the craftsman as a " hand " is the

THE LIBERATION OF INDUSTRY 121

same as that which crowds famihes into tenements,
and that the latter will be properly housed only by
the same associated effort as makes the former a
master in his own profession.

Hence the guilds are organized, not, like a trade
union, for the defence of economic rights, but for the
discharge of professional duties They do not aim at
making a large surplus out of the difference between
prices and costs : indeed, it is a fundamental rule of
the London Guild of Builders that the surplus earn-
ings cannot be distributed as dividends, but must be
used for the improvement of the service, and a
clause to the same effect formed part of the agree-
ment reached in July, 1920, between the Manches-
ter Guild Committee and the Ministry of Health.
What they ask is that the body for whom the work
is performed shall pay a sum which is sufficient to
keep men " on the strength", when, through no
fault of their own, there is no work for them to do.
The Guild Committee, with the aid of the Co-
operative Wholesale Society and the Co-operative
Bank, buys its own materials. The Local Auth-
ority which gives it a contract pays the prime
cost of the work, plus an allowance of ^40 per house
to cover payment for lost time, and of six per
cent, to cover the cost of plant and overhead
charges.

Governed by representatives of the building
trade unions, together with administrators and
technicians, and thus including craftsmen and
professional elements in a single organization, the
building guild committees command the industry
in the areas where they have taken root by com-
manding its personnel. To the Local Authorities,

122 THE ACQUISITIVE SOCIETY

who have been at their wits end to secure houses,
they can offer all that is offered by a contractor,
and can offer it more effectively, for they secure the
services of the elite of the profession, and enjoy
the enthusiastic support of the trade unions.
What they offer to the worker is the end of the
odious and degrading system under which he is
thrown aside, like unused material, whenever his
services do not happen to be required, member-
ship in a self-governing profession, and the con-
sciousness that he is working for the service of his
fellows, not to make profit for an employer.

It is too early yet to estimate the degree of
practical success which the guilds will achieve. But
young as they are, they have already discredited the
assumption that it is only the fear of unemployment
and the appetite for gain which will induce men to
work effectively, for, by general consent of all
observers, the standard of zeal, efficiency, and
esprit de corps shown by workers on contracts
undertaken by the guilds is strikingly above what is
normal in the industry. Since their future depends
entirely upon the inherent merits of the guild
organization, its demonstration that it works
economically and can give effect to its under- j
takings, it is difficult to understand why the Min-
istry of Health, when the shortage of houses is put
at anything from 120,000 to 500,000, should have
sought to limit their utility by fixing 20 as the
maximum number of contracts which it would
sanction between the guilds and Local Authorities.

The example set by the building guilds can
hardly fail to be of capital importance in all
industries, such (for example) as agriculture, where

f

THE LIBERATION OF INDUSTRY 123

the small capital required makes it possible for a
group of workers to offer their services to the
public without the intervention of an employer.
There is another way, however, of disposing of the
private owner, without nationalization, besides
that of " freezing him out." It may be called the
policy of attenuation. Ownership is not a right,
but a bundle of rights, and it is possible to strip
them off piecemeal as well as to strike them off
simultaneously. The ownership of capital involves,
as we have said, three main claims ; the right to
interest as the price of capital, the right to profits,
and the right to control, in virtue of which managers
and workers are the servants of shareholders.
These rights in their fullest degree are not the
invariable accompaniment of ownership, nor need
they necessarily co-exist. The ingenuity of
financiers long ago devised methods of grading
stock in such a way that the ownership of some
carries full control, while that of others does not,
that some bear all the risk and are entitled to all
the profits, while others are limited in respect to
both. All are property, but not all carry pro-
prietary rights of the same degree.

Even while the private ownership of industrial
capital still remains, it is possible to attenuate its
influence by insisting that it shall be paid not more
than a rate of interest fixed in advance, and that it
shall carry with it no right of control. In such
circumstances the position of the ordinary share-
holder would approximate to that of the owner of
debentures ; the property in the industry would
be converted into a mortgage on its profits ; while
the control of its administration and all profits in

124 THE ACQUISITIVE SOCIETY

excess of the minimum would remain to be vested
elsewhere.

Such a change in the character of ownership
would have three advantages. It would abolish
the government of industry by property. It
would end the payment of profits to functionless
shareholders by turning them into creditors paid
a fixed rate of interest. It would lay the founda-
tions for industrial peace by making it possible to
convert industry into a profession carried on by all
grades of workers for the service of the public, not
for the gain of those who own capital. The organ-
ization which it would produce will be described,
of course, as impracticable. It is interesting,
therefore, to find it is that which experience has led
practical men to suggest as a remedy for the dis-
orders of one of the most important of national
industries, that of building.

The question before the Committee of employers
and workmen, which issued in August, 191 9, a
Report upon the Building Trade, was " Scientific
Management and the Reduction of Costs." *
These are not phrases which suggest an economic
revolution ; but it is something little short of a
revolution that the signatories of the report propose.
For, as soon as they came to grips with the problem,
they found that it was impossible to handle it
effectively without reconstituting the general fabric
of industrial relationships which is its setting.
Why is the service supplied by the industry in-
effective ? Partly because the workers do not
give their full energies to the performance of their
part in production. Why do they not give their

♦Reprinted in The Industrial Council for the Building Industry.

THE LIBERATION OF INDUSTRY 125

best energies ? Because of " the fear of unemploy-
ment, the disinchnation of the operatives to make
unHmited profit for private employers, the lack of
interest evinced by operatives owing to their non-
participation in control, inefficiency both managerial
and operative." How are these psychological
obstacles to efficiency to be counteracted ? By
increased supervision and speeding up, by the
allurements of a premium bonus system, or the
other devices by which men who are too ingenious
to have imagination or moral insight would bully
or cajole poor human nature into doing what — if
only the systems they invent would let it ! — it
desires to do, simple duties and honest work ? Not
at all. By turning the building of houses into
what teaching now is, and what Mr. Squeers thought
it could never be, an honourable profession.

" We believe," they write, " that the great task
of our Industrial Council is to develop an entirely
new system of industrial control by the members of
the industry itself — the actual producers, whether by
hand or brain — and to bring them into co-operation
with the State as the central representative of the
community whom they are organized to serve."
Instead of unlimited profits, so " indispensable as
an incentive to efficiency," the employer is to be
paid a salary for his services as manager, and a rate
of interest on his capital which is to be both fixed
and (unless he fails to earn it through his own in-
efficiency) guaranteed ; anything in excess of it,
any " profits " in fact, which in other industries are
distributed as dividends to shareholders, he is to
surrender to a central fund to be administered by
employers and workmen for the benefit of the

126 THE ACQUISITIVE SOCIETY

industry as a whole. Instead of the financial
standing of each firm being treated as an inscrutable
mystery to the public, with the result that it is
sometimes a mystery to itself, there is to be a system
of public costing and audit, on the basis of which
the industry will assume a collective liability for
those firms which are shown to be competently
managed. Instead of the workers being dismissed
in slack times to struggle along as best they can,
they are to be maintained from a fund raised by a
levy on employers and administered by the trade
unions.

Thus there is to be publicity as to costs and
profits, open dealing and honest work and mutual
helpfulness, instead of the competition which the
nineteenth century regarded as an efficient sub-
stitute for them. " Capital " is not to " employ
labour." Labour, which includes managerial
labour, is to employ capital ; and to employ it at
the cheapest rate at which, in the circumstances
of the trade, it can be got. If it employs it so
successfully that there is a surplus when it has been
fairly paid for its own services, then that surplus
is not to be divided among shareholders, for, when
they have been paid interest, they have been paid
their due ; it is to be used to equip the industry
to provide still more effective service in the future.

So here we have the majority of a body of
practical men, who care nothing for socialist
theories, proposing to establish " organized Public
Service in the Building Industry," recommending,
in short, that their industry shall be turned into a
profession. And they do it, it will be observed, by
just that functional organization, just that con-

THE LIBERATION OF INDUSTRY 127

version of full proprietary rights into a mortgage
secured (as far as efficient firms are concerned) on
the industry as a whole, just that transference of the
control of production from the owner of capital
to those whose business is production, which, as we
said, is necessary if industry is to be organized for
the performance of service, not for the pecuniary
advantage of those who hold proprietary rights.
The objection commonly made to such proposals
for a limitation of profits as were advanced by the
Building Trade Committee is that exceptional
gains and exceptional losses must be set against
each other, that, on the average, profits are not
more than sufficient to evoke the supply of new
capital needed, and that it is only the possibility
of large gains which secures investment in specu-
lative undertakings. The risks of industry, how-
ever, are of various kinds ; broadly speaking, they
belong to one of three main types. There are, in
the first place, what may be called " natural risks,"
which arise from causes altogether outside the
control of the individuals or groups affected by
them, such as a drought in AustraHa or America
which sends up the price of wool or cotton, a famine
in China or India which destroys a market, a storm
at sea or a European war. There are, in the
second place, the risks of experiment or of economic
progress, which are incidental to the development
of an industry, such as expenditure upon costly
investigations, experiments or new processes, of
which many must fail in order that one may succeed,
or the attempt to establish a connection with some
new source of supply of raw material or some new-
market for the product.

128 THE ACQUISITIVE SOCIETY

In the third place, there are risks incidental
to competitive industry, which are due partly
to the possibility that one firm may be under-
sold by another, partly, and that in a more
important measure, to the fact that, as long as
each undertaking is operated as an independent
unit, the security of each is obviously less than the
security of the industry as a whole. Clearly, the
larger the unit of organization, the less, other
things being equal, are the risks. A coal mine is a
highly speculative investment, for even the most
skilful management, aided by the most expert
scientific advice, is liable to be baffled by unsuspec-
ted difficulties, such as faults and water. The coal
industry of a single district is much less speculative,
but even it, if, for example, it is mainly an export
district, may lose a market abroad. The coal
industry as a whole, until some other source of
power replaces coal, is speculative only to a very
slight extent indeed.

Of these three types of risk the two first are, in
one form or another, a necessary charge which
cannot be avoided. Some " natural " risks may be,
and are, made the subject of insurance. The
" risks of experiment " must obviously be incurred
unless industry is to stagnate, and must be met by
setting adequate funds aside for economic expansion.
Both, on a long view, are part of the cost of pro-
duction, and as costs they should be treated. To
say that profits are the payments for risks of this
kind is to claim, in effect, that they are Trust
funds and are earmarked to meet special liabilities.
But then, if they are Trust funds, they must be
used as Trust funds, and must not be liable to be

THE LIBERATION OF INDUSTRY 129

raided, as now, for the payments of dividends. The
sum to be set aside to meet these risks should not
be decided by the owners of capital or their agents —
for no man is fit to be judge in his own cause —
but by a joint body on which the workers, the con-
sumers and the State would be adequately repre-
sented. It should, in short, be removed from the
vague and indeterminate area, of which, under the
name of " profits," the owner of capital claims to
dispose as he pleases, and should be reduced to
terms sufficiently definite for discussion and
criticism.

It is obvious, however, that " competitive
risks " are in a different category. They are not
due to " the act of God," nor are they the price
of economic progress. They arise primarily from
the manner in which industry is organized, and
diminish or increase as that organization changes.
They are normally at their greatest when competi-
tion is perfectly free ; they are normally dimin-
ished when free competition is replaced by some
kind of agreement. No intelligent judgment can
be passed on the statement that profits are the
payment for risk-taking and that the speculative
character of industry makes a fixed rate of interest
on capital impracticable, until it is known in pre-
cisely what category the risks in question fall.
If it is plain that such risks as are inevitable must
be borne, it is no less evident that no justification
for high profits is offered by the existence of such
risks as are not. Risks which are avoidable
ought not, in short, to be paid for ; they ought to
be avoided. The speculative element in industry
cannot be altogether eliminated. But to claim

130 THE ACQUISITIVE SOCIETY

that the payment to capital should be increased
merely because its owners have chosen to organize
industry in a way which makes it unnecessarily
speculative, is irrational. It is like proposing that
a general should be decorated merely because,
when the opportunity of a comparatively bloodless
victory was open to him, he adopted an order of
battle which resulted in numerous casualties.

Moreover, the present tendency of industrial
organization, as compared with that of the period
from 1800 to 1880, is to diminish what have been
called the '' competitive risks " of industry by
bringing competition under control, and, some-
times, by eliminating it altogether. A whole
chapter, indeed, of recent economic history is
concerned with the attempts of the business world
to lighten risks by mutual arrangements, varying
from " gentlemen's agreements " for the stabiliza-
tion of prices, through one form or another of
kartell, to the complete amalgamation of formerly
independent businesses. When a really effective
combination is established, it is evident that the
security of business is greatly increased, since one
whole order of risks is eliminated altogether. The
possibility of over-production followed by reckless J
price-cutting is removed. More important, the ^
credit of the different plants in the industry
becomes that of the whole.

In such circumstances the objection that the
speculative character of industry makes it impos-
sible to restrict the payment made to the owner
of capital to a fixed rate of interest loses most of
its weight, since the risks which are the conven-
tional justification for high dividends have very

THE LIBERATION OF INDUSTRY 131

largely disappeared. The capitalist may plausibly
argue that an individual cotton mill, or soap factory,
or coal mine is a speculation in which only the
prospect of large profits would induce him to
invest ; but he cannot say the same about Coats'
Sewing-thread Combine, Lord Leverhulme's Soap
Trust, or the coal industry when it is treated
as a financial unit. By his own admission, when
separate firms are merged in a single combination,
profits ought not, as is normally the case, to be
increased. Since the security offered is better,
they ought to be diminished.

The question raised by the Report of the Build-
ing Trade Committee is whether industry cannot
be so organized, even under private ownership,
that capital may be paid a stipulated rate, and that
residuary profits, when they arise, may pass to the
worker and the consumer. Its suggestion is, in
effect, that, instead of the earnings of capital
being treated as an undifferentiated block, of which
the directors of an enterprise can dispose as they
please, a clear discrimination should be made
between the payment needed to secure the neces-
sary supplies of capital, the reserves required to meet
risks, the salary of the employer as manager,
and such surplus, if any, as may arise. In
industries which are, in effect, monopolies, the
difficulty does not appear to be great. The State
already prescribes the sliding scale in accordance
with which the dividends of Gas Companies must
be paid, and controls — a necessary corollary — the
issue of new capital. There does not appear to be any
insuperable objection to making the adoption of a
similar arrangement a condition precedent to the

132 THE ACQUISITIVE SOCIETY

sanctioning of combination in other industries.
Were that course pursued, the firms concerned
would pay the market rate of interest, but no more ;
and the surplus profits now received by shareholders
in (for example) Coats' Combine, would be returned
to the consumer in lower prices and to the worker
in improved conditions.

In industries which are not controlled by a com-
bination, an alternative course is suggested by the
proposal of the Building Trade Committee that the
trade should combine so far as is needed to place
a financial guarantee behind those firms which
satisfy a body representing the whole trade that
they are competently managed. When even this
degree of united action is impossible, there would
remain the proposal that firms should be required,
before they distribute any dividends, to set aside
a prescribed sum (equal, for example, to a certain
proportion of their paid-up capital) as reserves to
meet risks, and that, when that sum had been pro-
vided, the maximum percentage to be paid to
shareholders should be fixed by a Public Authority,
and issues of new capital made only with its
sanction.

Whether such proposals are adopted or not, the
Building Trades Committee are undoubtedly right
in thinking that it is no longer sufficient to defend
profits in general terms by the statement that there
is a " rough correspondence " between profits and
risks. A rough correspondence, when it exists,
is not sufficient. The argument that business is
a lottery, and that profits and losses cancel each
other, is not likely to be accepted, until it is proved
beyond doubt that it is impossible for the produc-

THE LIBERATION OF INDUSTRY 133

tive work of the world to be organized upon methods
more dignified and rational than those of the
gambling saloon, from the analogy of which such
double-edged arguments appear often to be
drawn.

The present position of the capitalist employer
resembles, it may be suggested, that of a king in
the days when no clear distinction was made be-
tween the personal and the official revenue of the
monarchy. The result of that situation is a matter
of history. Kings (like employers) were not worse
than other men. But they spent on themselves
money which they should have spent on the
business of the nation. Parliaments (like trade
unions) were not more short-sighted than other
bodies. But they cut down the revenue available
for public necessities, in order to prevent it being
wasted on private luxuries. And the efficiency of
the public services suffered from both alike, as
the efficiency of industry suffers to-day. The
remedy discovered after some centuries of struggle
was to make a sharp division between the personal
and the official revenue of the monarch by the
establishment of a Civil List.

To put himself upon a " Civil List " would be
the course of wisdom for the private employer who
desires, not merely to cling to every tittle of his
power, but to adapt his position to a new situation.
In the circumstances of the moment, a policy
of prudent conservatism would have as its object,
it may be suggested, to narrow the area of
contentious twilight which at present surrounds
the financial operations of industry. It would
make a point of placing all figures as to costs and

134 THE ACQUISITIVE SOCIETY

profits on the table. It would discriminate sharply
between interest and profits, and would prove that
no higher payment was made to capital than was
necessary, in the conditions of the market, to obtain
its services. It would aim, in short, both at con-
verting the capitalist into a rentier and at striking
an alliance between managerial and other kinds
of labour, which would be strong enough to put
pressure upon him.

Compared, however, either with the programme
of the Building Guilds or with Public Ownership,
this proposal to retain the private employer, while
limiting his functions and converting him from a
profitmaker into a manager has, with all its attrac-
tions, certain obvious disadvantages. For one
thing, the real capital of a business is often almost
undiscoverable. For another thing, the course
suggested is open to the objection that it cir-
cumscribes the authority which at present directs
industry, without, like either of the alternative
proposals, providing an effective substitute for it.
Had the movement against the control of produc-
tion by property taken place before the rise of
limited companies, in which ownership is separated
from management, the transition to the organiza-
tion of industry as a profession might also have
taken place, as the employers and workmen in the
building trade propose that it should, by limiting
the rights of private ownership without abolishing
it. But that is not what has actually happened,
and therefore the proposals of the building trade
are not capable of general application. It may be
possible to retain private ownership in building and
in industries like building, while changing its

THE LIBERATION OF INDUSTRY 135

character, precisely because in building the employ-
er is normally not merely an owner, but something
else as well. He is a manager ; that is, he is a work-
man. And because he is a workman, whose inter-
ests, and still more whose professional spirit as a
workman may often outweigh his interests and
merely financial spirit as an owner, he can form
part of the productive organization of the industry,
after his rights as an owner have been trimmed and
limited.

But that dual position is abnormal, and in the
highly organized industries is becoming more ab-
normal every year. In coal, in cotton, in ship-
building, in many branches of engineering the
owner of capital is not, as he is in building, an
organizer or manager. His connection with the
industry and his interest in it is purely financial.
He is an owner and nothing more. And because his
interest is merely financial, so that his concern is
dividends, and production only as a means to divi-
dends, he cannot be worked into an organization of
industry which vests administration in a body
representing all grades of producers, or producers
and consumers together, for he has no purpose in
common with them. Joint councils between
workers and managers may succeed, but joint
councils between workers and owners or agents of
owners, like most of the so-called Whitley Councils,
will not, because the necessity for the mere owner
is itself one of the points in dispute.

The master builder, who owns the capital
used, can be included, not qua capitalist, but qua
builder, if he surrenders some of the rights of
ownership, as the Building Industry Committee

136 THE ACQUISITIVE SOCIETY

proposed that he should. But if the shareholder
in a colliery or a shipyard abdicates the con-
trol and unlimited profits to which, qua
capitalist, he is at present entitled, he abdicates
everything that makes him what he is, and has no
other standing in the industry. He cannot share
like the master builder, in its management, be-
cause he has no qualifications which would enable
him to do so. His object is profit ; and if industry
is to become, as employers and workers in the
building trade propose, an " organized public
service," then its subordination to the shareholders
whose object is profit, is, as they clearly see, pre-
cisely what must be eliminated. The master
builders propose to give it up. They can do so
because they have their place in the industry in
virtue of their function as workmen. But if the
shareholder gave it up, he would have no place
at all.

In coal mining, therefore, where ownership and
management are sharply separated, the owners
will not admit the bare possibility of any system
in which the control of the administration of the
mines is shared between the management and the
miners. " I am authorized to state on behalf of
the Mining Association," Lord Gainford, the chief
witness on behalf of the mine-owners, informed the
Coal Commission, " that if the owners are not to be
left complete executive control they will decline
to accept the reponsibility for carrying on the in-
dustry."* So the mine-owners blow away in a
sentence the whole body of plausible make-believe
which rests on the idea that, while private owner-

♦ Coal Industry Commission, Minutes of Evidence, Vol. i, p. 2506.

THE LIBERATION OF INDUSTRY 137

ship remains unaltered, industrial harmony can be
produced by the magic formula of joint control. And
they are right. The representatives of workmen
and shareholders, in mining and in other industries,
can meet and negotiate and discuss. But joint
administration of the shareholders' property by a
body representing shareholders and workmen is
impossible, because there is no purpose in common
between them. For the only purpose which could
unite all persons engaged in industry, and overrule
their particular and divergent interests, is the
provision of service. And the object of share-
holders, the whole significance and metier of in-
dustry to them, is not the provision of service but
the provision of dividends.

(f) N ationalization as a problem in Constitution-
making.

Hence in industries where management is di-
vorced from ownership, as in most of the highly
organized trades it is to-day, there is no obvious
halfway house between the retention of the
present system and the complete extrusion of the
capitahst from the control of production. The
change in the character of ownership, which is
necessary in order that coal or textiles and ship-
building may be organized as professions for the
service of the public, cannot easily spring from
within. The blow needed to liberate them from
the control of the property-owner must come from
without.

In theory it might be struck by action on
the part of the organized workers, who would abolish
residuary profits and the right of control by the

J

138 THE ACQUISITIVE SOCIETY

mere procedure of refusing to work as long as they
were maintained, on the historical analogy offered
by peasants who have destroyed predatory pro-
perty in the past by declining to pay its dues and
admit its government, in which case ParHament
would intervene only to register the community's
assent to the fait accompli. Some such result appears
to have been the design of the recent action of the
Italian workers in seizing the factories. In England,
however, the conditions of modern industry being
what they are, that course, apart from its other dis-
advantages, is so unlikely to be attempted, or, if
attempted, to succeed, that it can be neglected.
The alternative to it is that the change in the
character of property should be affected by legisla-
tion in virtue of which the rights of ownership in
an industry are bought out simultaneously.

In either case, though the procedure is different,
the result of the change, once it is accomplished, is
the same. Private property in capital, in the
sense of the right to profits and control, is abolished.
What remains of it is, at most, a mortgage in favour
of the previous proprietors, a dead leaf which is
preserved, though the sap of industry no longer .
feeds it, as long as it is not thought worth while to I
strike it off. And since the capital needed to main- |
tain and equip a modern industry could not be T
provided by any one group of workers, even were it
desirable on other grounds that they should step
completely into the position of the present owners,
the complex of rights which constitutes ownership
remains to be shared between them and whatever
organ may act on behalf of the general community.
The former, for example, may be the heir of the

I

^.

THE LIBERATION OF INDUSTRY 139

present owners as far as the control of the routine
and administration of industry is concerned : the
latter may succeed to their right to dispose of
residuary profits. The elements composing pro-
perty, have, in fact, to be disentangled : and the
fact that to-day, under the common name of
ownership, several different powers are vested in
identical hands, must not be allowed to obscure the
probability that, once private property in capital
has been abolished, it may be expedient to re-
allocate those powers in detail as well as to transfer
them en bloc.

The essence of a profession is, as we have suggest-
ed, that its members organize themselves for the
performance of function. It is essential therefore,
if industry is to be professionalized, that the aboli-
tion of functionless property should be not inter-
preted to imply a continuance under public owner-
ship of the absence of responsibility on the part of
the personnel of industry, which is the normal
accompaniment of private ownership working
through the wage-system. It is the more important
to emphasize that point, because such an implication
has sometimes been conveyed in the past by some
of those who have presented the case for such a
change in the character of ownership as has been
rged above.

The name consecrated by custom to the trans-
ormation of property by public and external action
is Nationalization. But Nationalization is a word
which is neither very felicitous nor free from am-
biguity. Properly used, it means merely owner-
ship by a body representing the nation — " the
nation " considered as the general public of con-

140 THE ACQUISITIVE SOCIETY

sumers, rather than as the subjects of a particular
poHtical allegiance ; and when it can be shown that
the territorial state is not a suitable organization
for the administration of industry, the case for
" nationalization," in the sense of public ownership,
remains unaltered. It is an unfortunate chance
that English speaking peoples employ one word to
express what in France and Germany are expressed
by two, etatisation or Ferstaatlichung and socialisation
or Sozialisierung, — words which in those languages,
unlike the common English practice, are used, not
as synonyms, but as antitheses — and that no
language possesses a vocabulary to express neatly the
finer shades in the numerous possible varieties of
organization under which a public service may be
carried on.

The result has been that the singularly colourless
word " Nationalization " almost inevitably tends
to be charged with a highly specialized and
quite arbitrary body of suggestions. It has
come in practice to be used as equivalent to a
particular method of administration, under which
officials employed by the State step into the posi-
tion of the present directors of industry, and exer-
cise all the power which they exercised. So those
who desire to maintain the system under which
industry is carried on, not as a profession serving
the public, but for the advantage of shareholders,
attack nationalization on the ground that state
management is necessarily inefficient, and tremble
with apprehension whenever they post a letter in a
letter-box ; and those who desire to change it
reply that state services are efficient, and praise
God whenever they use a telephone ; as though

THE LIBERATION OF INDUSTRY 141

either private or public administration had certain
pecuHar and unalterable characteristics, instead of
depending for its quality, like an army or railway
company or school, and all other undertakings,
public and private alike, not on whether those who
conduct it are private officials or state officials, but
on whether they are properly trained for their
work and can command the good will and confidence
of their subordinates.

The arguments on both sides are ingenious, but in
reality nearly all of them are beside the point. The
merits of nationalization do not stand or fall with
the efficiency or inefficiency of existing state de-
partments as administrators of industry. For
nationalization, which means public ownership,
does not involve placing industry under the machin-
ery of the political state, with its civil servants con-
trolled, or nominally controlled, by Cabinet Minis-
ters, and is compatible with several different types
of management. The constitution of the industry
may be " unitary," as is (for example) that of the
post-office. Or it may be " federal," as was that
designed by Mr. Justice Sankey for the coal
industry. Administration may be centralized or
decentralized. The authorities to whom it is
entrusted may be composed of representatives of
the consumers, or of representatives of professional
associations, or of state officials, or of all three in
several different proportions. Executive work may
be placed in the hands of civil servants, trained, re-
cruited, and promoted as in the existing state de-
partments, or a new service may be created with
a procedure and standards of its own. The industry
may be subject to Treasury control, or it may be

142 THE ACQUISITIVE SOCIETY

financially autonomous. The problem is, in fact,
of a familar, though difficult, order. It is one of
constitution making.

It is commonly assumed by controversialists
that the organization and management of a nation-
alized industry must, for some undefined reason,
be similar to that of the Post-Office. One might as
reasonably suggest that the pattern and exemplar
of private enterprise must be the Steel Corporation
or the Imperial Tobacco Company. The adminis-
trative systems obtaining in a society which has
nationalized its foundation industries will, in fact,
be as various as in one that resigns them to private
ownership ; and to discuss their relative advan-
tages, without defining what particular type of each
is the subject of reference, is to-day as unhelpful as
to approach a modern political problem in terms of
the Aristotelian classification of constitutions.

The highly abstract dialectics as to " enterprise,"
" initiative," " bureaucracy," " red tape," " de-
mocratic control," " state management," which
fill the press of countries occupied with industrial
problems, really belong to the dark ages of economic
thought. If the student of these questions would
wave aside for a moment the inflammatory images
of hide-bound pedantry and irresponsible caprice
which such phrases evoke, and would consider ^
dispassionately the various types of organization I
adopted or suggested, which alone matter in prac-
tice, he might be less confident as to the merits or
demerits of public ownership in general, but he
would be in a better position to pronounce an
opinion upon some particular examples of it. He
would discover that the varieties of administrative

THE LIBERATION OF INDUSTRY 143

and managerial system applied to public services
have been at least as numerous as the undertakings
which have been " nationalized," and considerably
more numerous than the societies which have
" nationalized " them.

Apart from differences in the area over which the
service is supplied, in the degree of centralization
with which it is administered, and in relations to
private business ranging from competition on equal
terms to complete monopoly, the management of
pubHc undertakings may belong to one of several
types. The practice of Great Britain, as exempli-
fied by the Post Office, by Woolwich Arsenal and
by the National Dockyards, has been to apply to
the control of industry the same type of organiza-
tion as to those Departments, such as the Home
Office, which are not concerned with production.
Administration is committed to civil servants under
a ministerial head with a seat in the Cabinet, and
the efficiency of the service is supposed to be main-
tained by the Minister's liability to ParHamentary
criticism.

This system has developed, not as the
result of any deliberate decision as to its merits,
but through the extension to reproductive under-
takings of precedents derived from services of
another kind. A constitution of such a type, based on
political analogies, is not the only constitution
possible, nor is it even the commonest ; and if it is
desired to discover some substitute for it, several
alternatives are already in existence. In Austraha,
and, since the nationalization of certain of its
great railways, in Canada, the State Railways are
administered by Boards of Commissioners who are

144 THE ACQUISITIVE SOCIETY

practically irremoveable during their term of office,
and the permanent commission is a favourite de-
vice in American Cities. The constitution adopted
for the British Liquor Control Board vested
authority in the hands of a body composed of
representatives of certain great Departments, of
labour organizations and of employers, with an
admixture of experts. The bodies administering
the public undertakings of British Local Author-
ities consist usually of Committees of elected
Councillors. But public docks and harbours are
controlled by bodies representing the users of the
service. The Port of London Authority set up by
the Act of 1908 (which has a very bad constitution)
consists, in addition to a Chairman and Vice-Chair-
man, of 18 members elected, on an elaborate
system of plural voting based on property, by
payers of dues, wharfingers and owners of river
craft, and of 10 appointed members, of whom two
must be representatives of labour. The London
Water Board, which replaced the London Water
Companies, and which administers a capital of
some ^^49,000,000 and supplies water to a popula-
tion of about 7,000,000 persons, is composed under
the Act of 1902 of 66 members appointed. by the
Local Authorities of the areas served.

Normally it appears to be held that the consumers
are adequately protected by the criticism which is
supposed to come from a representative body,
whether Parliament or a Municipal Council. But
sometimes, as in connection with the Ministry of
Food, special machinery for expressing their de-
mands and criticisms has been established. The
miners proposed that, if the mines were transferred

THE LIBERATION OF INDUSTRY 145

to public ownership, in addition to the representa-
tion given the consumer on the District Mining
Councils and the National Mining Council, a per-
manent Fuel Consumer's Council should be set up,
representing users of household and industrial coal,
which would have the right to call for full infor-
mation, to press, when it thought fit, for changes of
method and policy, and to meet in joint session the
body administering the industry. In view of the
complete helplessness of the ordinary householder
when confronted with a rise of price hitherto, and
of the well-known fact that collieries and distribu-
tors took advantage of every cold snap or threatened
dispute to raise prices against him, there is some-
thing cynically comic in the suggestion that he has
anything but an immense increase in influence and
in power of self-protection to gain from public
ownership accompanied by such a scheme of
administration as was advanced by the miners and
by Mr. Justice Sankey.

It may be remarked in parenthesis, indeed,
that the view commonly expressed by the
business world, that a public service is likely to
ride roughshod over the consumer, appears to
be the precise opposite of the truth. The real
danger is lest it should be too pliable, and
should sacrifice the permanent interests of the
service to the demand for immediate cheapness.
The instantaneous outcry against " inefficiency,"
" waste " and " bureaucratic tyranny," by which
the proposal to increase the charges made by a
nationalized service is met, is in itself the very best
evidence of the protection to the consumer which
is offered by PubHc Ownership. In private in-

146 THE ACQUISITIVE SOCIETY

dustry the prices of clothes, boots, food and a dozen
other commodities rose by over 160 per cent, be-
tween 1 914 and 1 92 1, and no one did more than
utter an occasional grumble. But the proposal
of the Post Office to raise telephone charges evoked
in the business world a storm of indignation. As
the users of underground and suburban railways
know to their cost, certain Railway Companies
habitually sell non-existent places in third-class
carriages, and if, much against his will, the unfor-
tunate traveller enters a carriage of another class,
proceed to collect from him the excess fare to
which the inadequacy of their arrangements have
made him liable. If the railways were nationalized
the Press would ring with protests against State
incompetence and the sharp practice of officials.
Since they are in private hands, not a murmur is
heard. The explanation is simple. The policy of a
public undertaking can be modified by criticism,
that of a private business cannot. The former is
held to be acting improperly if it squeezes the
consumer ; the latter would often be regarded as
highly eccentric if it did anything else.

Not only may the composition of the controlling
body, and its relations to the users of the service,
vary enormously, but its relations to its employees
may be even more diverse. It may treat all of
them as established " Civil Servants," or it may so
treat none of them. It may, as the British Ministry
of Transport has proposed, and as the French,
Swiss and Italian State Railway Administrations
have done, give the workers direct representation
on the Authorities governing the industry, or it may
treat them as " hands " even to the fullest extent

THE LIBERATION OF INDUSTRY 147

demanded by the British Railway Companies.
The fact that they are public servants may make no
difference to their civil rights ; or, as in Prussia
before 1914, they may be dismissed if they join a
union. They may be allowed to join a union, but
they may be told, like the shipyards employees
of the British Admiralty, that they are not allowed
to strike, or like the Postal Servants, that they must
not criticize the administration of the service.
Finally, an attempt may be made, as at one time
in Australia, to neutralize the political influence
which they are supposed to wield, by creating a
special constituency for them.

Such are a few of the varieties of organization
which lie on the surface. When one turns from
them to consider the proposals advanced, they are
found to be almost inexhaustible. The attempt to
apply a single standard of criticism, based on the
mere word Nationalization, to the administration of
Prussian coal mines before 1914, the four different
reports of the two recent German coal commissions,
the programmes of Mr. Justice Sankey and of the
Miners' Federation and the half dozen different
plans of administration brought before the British
Coal Commission, to the American " Plumb plan,"
the proposals of the British Railway Nationaliza-
tion Council, and the fifty odd programmes of
public ownership which are afoot, frequently with
official sanction, in the near East, is merely un-
intelligent. It is like supposing that France and
America are governed in the same way merely
because they are both called Republics, or that
down to 191 8 Prussia had the same constitution
as England because it was called a monarchy.

148 THE ACQUISITIVE SOCIETY

It is noticeable, indeed, that the chief character-
istic of almost all recent programmes of nationaliz-
ation has been the insistence that the administra-
tion of a nationalized industry should not, except
when unavoidable, be entrusted to the ordinary
machinery of the political state. In Great Britain,
France, Germany, Italy, and the British Dominions
— to go no further afield — there appears to be gener-
al agreement among all contemporary supporters
of the policy of public ownership that, though the
State must intervene to carry out the act of ex-
propriation by due process of law, the administrative
body which succeeds the private proprietor must not
be a department directly dependent on the Govern-
ment of the day, but an authority representing at
least those who supply the service and those who
use it, and acting with as much elasticity as it is
possible for any large scale organization, whether
public or private, to achieve. Whether that con-
clusion— which, be it observed, is the precise
opposite of the views usually ascribed to advocates
of nationalization by their critics — is accepted or
not, serious discussion of the future of industry,
as distinct from mere polemics, will not progress
until it- is recognised that the problem is one of
making a constitution, and that in making a con-
stitution, words, so long as they are not outrageous,
are less important than facts. The fact is that
public ownership, like private enterprise, may be
accompanied by any one of a dozen different
systems of organization, and that its effect, good or
bad, will depend, not upon the name used to de-
scribe it, but upon which particular system of
organization is adopted in any given case.

THE LIBERATION OF INDUSTRY 149

The first task of the student, whatever his per-
sonal conclusions, is, it may be suggested, to con-
tribute what he can to the restoration of sanity by
insisting that instead of the argument being con-
ducted with the counters of a highly inflated and
rapidly depreciating verbal currency, the exact
situation, in so far as is possible, shall be stated as
it is ; uncertainties (of which there are many) shall
be treated as uncertain, and the precise meaning
of alternative proposals shall be strictly defined.
Not the least of the merits of Mr. Justice Sankey's
report was that, by stating in great detail the type
of organization which he recommended for the
Coal Industry, he imparted a new precision and
reality into the whole discussion. Whether his con-
clusions are accepted or rejected, it is from the basis
of clearly defined proposals such as his that the
future discussion of these problems must proceed.
It may not find a solution. It will at least do some-
thing to create the temper in which alone a reason-
able solution can be sought.

Nationalization, then, is not an end, but a means to
an end, and when the question of ownership has
been settled the question of administration remains
for solution. As a means it is likely to be indispens-
able in those industries in which the rights of
private proprietors cannot easily be modified with-
out the action of the State, just as the purchase of
land by county councils is a necessary step to the
establishment of small holders, when landowners
will not voluntarily part with their property for the
purpose. But the object in purchasing land is to
establish small holders, not to set up farms ad-
ministered by state officials ; and the object of

150 THE ACQUISITIVE SOCIETY

nationalizing mining or railways or the manufacture
of steel should not be to establish any particular
form of state management, but to release those who
do constructive work from the control of those
whose sole interest is pecuniary gain, in order that
they may be free to apply their energies to the true
purpose of industry, which is the provision of
service, not the provision of dividends.

When the transference of property has taken place,
it will probably be found that the necessary provision
for the government of industry will involve not
merely the freedom of the producers to produce, but
the creation of machinery through which the con-
sumer, for whom he produces, can express his wishes
and criticize the way in which they are met, as at
present he normally cannot. But that is the second
stage in the process of reorganizing industry for the
performance of function, not the first. The first is
to free it from its present subordination to the pecuni-
ary interests of the owner of property, because they
are the magnetic pole which sets all the compasses
wrong, and which causes industry, however swiftly
it may progress, to progress in the wrong direction.

Nor does this change in the character of property
involve a breach with the existing order so sharp as
to be impracticable. The phraseology of poHtical
controversy continues to reproduce the conventional
antitheses of the early nineteenth century ; " pri-
vate enterprise " and " public ownership " are still'
contrasted with each other as light with darkness
or darkness with light. But, in reality, behind the
formal shell of the traditional legal system, the
elements of a new body of relationships have
already been prepared, and find piecemeal applica-

THE LIBERATION OF INDUSTRY 151

tion through policies devised, not by socialists,
but by men who repeat the formulae of individual-
ism, at the very moment when they are under-
mining it. The Esch-Cummins Act in America,
the Act establishing a Ministry of Transport in
England, Sir Arthur Duckham's scheme for the
organization of the coal mines, the proposals with
regard to the coal industry advanced at one time
by the British Government itself, appear to have
the common characteristic of retaining private
ownership in name, while attenuating it in fact,
by placing its operations under the supervision,
accompanied sometimes by a financial guarantee, of
a public authority.

Schemes of this general character appear, indeed,
to be the first instinctive reaction produced by the
discovery that private enterprise is no longer
functioning effectively. It is probable that they
possess certain merits of a technical order, analogous
to those associated with the amalgamation of
competing forms into a single combination. It is
questionable, however, whether the compromise
which they represent is permanently tenable.
What, after all, it may be asked, are the advantages
of private ownership when it has been pared down
to the point which policies of this order propose ?
May not the '' owner," whose rights they are de-
signed to protect, not unreasonably reply to their
authors, " Thank you for nothing " ? Individual
enterprise has its merits : so also, perhaps, has
public ownership. But, by the time these schemes
have done with it, not much remains of " the simple
and obvious system of natural liberty," while
their inventors are precluded from appealing to the

152 THE ACQUISITIVE SOCIETY

motives which are emphasized by advocates of
nationalization. It is one thing to be an entrepren-
eur with a world of adventure and unlimited profits
— if they can be achieved — before one. It is quite
another to be a director of a railway company or
coal corporation with a minimum rate of profit
guaranteed by the State, and a maximum rate of
profit which cannot be exceeded. Hybrids are apt
to be sterile. It may be questioned whether, in
drawing the teeth of private capitalism, this type of
compromise does not draw out most of its virtues
as well.

So, when a certain stage of economic develop-
ment has been reached, private ownership, by the
admission of its defenders, can no longer be toler-
ated in the only form in which it is free to display
the characteristic, and quite genuine, advantages
for the sake of which it used to be defended. And,
as step by step it is whittled down by tacit con-
cessions to the practical necessity of protecting the
consumer, or eliminating waste, or meeting the
claims of the workers, public ownership becomes,
not only on social grounds, but for reasons of
economic eflficiency, the alternative to a type of
private ownership which appears to carry with it
few of the rights which are normally valued in
ownership and to be singularly devoid of privacy.

It would be a mistake to visualize the displacement
of the private capitalist from his position of eco-
nomic sovereignty as taking place only through
the process of nationalization. Over a considerable
field of industry the Co-operative Movement has
already substituted the motive of communal service
for that of profit, and supplies annually to its

THE LIBERATION OF INDUSTRY 153

members, through bodies representing the con-
sumers, goods to the value of some hundred million
pounds. It has found a genuine and practicable
alternative to the conduct of industry by the
agents of shareholders for the pecuniary gain of
shareholders, and has thus established the first
condition without whi^h an effective partnership
between producer and consumer is impossible.
The extension of State ownership will take place,
it may be suggested, without in any way impinging
on the activities of the Co-operative Movement,
or on the experiments in " industrial self-govern-
ment " such as are now being made in the building
industry. Its special sphere will be the great
foundation industries, which, so far, have set at
defiance the one movement and the other.

Inevitably and unfortunately the change must be
gradual. But it should be continuous. When, as
in the last few years, the State has acquired the
ownership of great masses of industrial capital, it
should retain it, instead of surrendering it to private
capitalists, who protest at once that it will be
managed so inefficiently that it will not pay and
managed so efficiently that it will undersell them.
When estates are being broken up and sold, as they
are at present, public bodies should enter the
market and acquire them.

Most important of all, the ridiculous barrier
which at present prevents English Local Authorities
from acquiring property in land and industrial
capital, except for purposes specified by Act of
Parliament, should be abolished, and they should
be free to undertake such services, including (in so
far as it is not already covered by Co-operation)

K

I

154 THE ACQUISITIVE SOCIETY

the whole field of retail distribution, as their citizens
may desire. According to the theory upon which
the Local Government of Great Britain is at present
based, Local Authorities, from the tiniest Parish
Council to the largest County Borough, can exercise
only the powers specially conferred on them by
Parliament, and, if they desire additional powers,
they can obtain them only by the cumbrous and
expensive process of private bill legislation. This
strict limitation of the sphere of Local Authorities
dates from the Municipal Corporations Act of 1835,
which was admirable in its reconstruction of the
machinery of municipal government, but which
was passed at a time when almost the only proper
functions of local bodies were conceived to be the
preservation of public order and the administration
of local finances.

In an age when Municipal Corporations were
corrupt oligarchies, the main object of reformers
was, not to increase their powers, but to diminish
their abuses. But there is no analogy between
modern municipalities and the strongholds of
incompetence and privilege which were reformed
eighty years ago. So far, at least, as County
Boroughs are concerned, the right principle is that,
instead of their being allowed to do only what they
are expressly empowered to do, they should be free
to do anything which they are not forbidden to do.
Central control is necessary, in order to ensure that
posterity is not burdened by excessive capital
expenditure, to preserve a minimum standard of
efficiency, and to adjust the claims of conflicting
authorities. But, provided these conditions are
satisfied, there is no reason why great Municipal

THE LIBERATION OF INDUSTRY 155

Corporations should not undertake such services
as they may from time to time deem expedient.
The objection to public ownership, in so far as
it is intelligent, is in reality largely an objection
to over-centralization. But the remedy for over-
centralization is not the maintenance of function-
less property in private hands, but the decen-
tralized ownership of public property. When
Birmingham and Manchester and Leeds are the
little republics which they should be, there is no
reason to anticipate that they will tremble at a
whisper from Whitehall.

These things should be done steadily and con-
tinuously, quite apart from the special cases like
that of the mines, railways, and canals, where the
private ownership of capital is stated by the experts
to have been responsible for intolerable waste,
or the manufacture of armaments and alcoholic
liquor, which are politically and socially too danger-
ous to be left in private hands. They should be
done not in order to establish a single form of
bureaucratic management, but in order to release
industry from the domination of proprietary
interests, which, whatever the form of manage-
ment, are not merely troublesome in detail but
vicious in principle, because they divert it from
the performance of function to the acquisition of
gain. If at the same time private ownership is
shaken, as recently it has been, by action on the
part of particular groups of workers, so much the
better. There are more ways of killing a cat than
drowning it in cream, and it is all the more likely
to choose the cream if they are explained to it. But
the two methods are complementary, not alternative,

156 THE ACQUISITIVE SOCIETY

and the attempt to found rival schools on an im-
aginary incompatibility between them is a bad case
of the odium sociologicum which afflicts reformers.

VIII

THE "VICIOUS CIRCLE"

What form of management should replace the
administration of industry by the agents of share-
holders ? What is most likely to hold it to its main
purpose, and to be least at the mercy of pre-
datory interests and functionless supernumeraries,
and of the alternations of sullen dissatisfaction and
spasmodic revolt which at present distract it ?
Whatever the system upon which industry is
administered, one thing is certain. Its economic
processes and results must be public, because only
if they are public can it be known whether the
service of industry is vigilant, effective and honour-
able, whether its purpose is being reaHsed and its
function carried out. The defence of secrecy in
business resembles the defence of adulteration on
the ground that it is a legitimate weapon of com-
petition ; indeed it has even less justification than
that famous doctrine, for the condition of effective
competition is publicity, and one motive for secrecy
is to prevent it.

Those who conduct industry at the present time,
and who are most emphatic that (as the Duke of
Wellington said of the unreformed House of Com-
mons, they " have never read or heard of any measure
up to the present moment which can in any degree
satisfy the mind ") the method of conducting
it can in any way be improved, are also those

157

158 THE ACQUISITIVE SOCIETY

apparently who, with some honourable exceptions,
are most reluctant that the full facts about it
should be known. And it is crucial that they
should be known. It is crucial not only because, in
the present ignorance of the real economic situation,
all industrial disagreements tend inevitably to be
battles in the dark, in which " ignorant armies
clash by night," but because, unless there is complete
publicity as to profits and costs, it is impossible to
form any judgment either of the reasonableness
of the prices which are charged or of the claims to
remuneration of the different parties engaged in
production. For balance sheets, with their oppor-
tunities for concealing profits, give no clear light
upon the first, and no light at all upon the second.
And so, when the facts come out, the public is
aghast at revelations which show that industry is
conducted with bewildering financial extravagance.
If the full facts had been published, as they should
have been, quarter by quarter, these revelations
would probably not have been made at all, because
publicity itself would have been an antiseptic and
there would have been nothing sensational to
reveal.

The events of the last few years are a lesson
which should need no repetition. The Government,
surprised at the price charged for making shells at a
time when its soldiers were ordered by Headquarters
not to fire more than a few rounds per day, whatever
the need for retaliation, because there were not
more than a few to fire, establishes a costing de-
partment to analyze the estimates submitted by
manufacturers and to compare them, item by
item, with the cost in its own factories. It finds

THE "VICIOUS CIRCLE" 159

that, through the mere pooling of knowledge,
" some of the reductions made in the price of shells
and similar munitions," as the chartered account-
ant employed by the department tells us, " have
been as high as 50% of the original price." The
household consumer grumbles at the price of coal.
For once in a way, amid a storm of indignation
from influential persons engaged in the industry,
the facts are published. And what do they show ?
That, after 2/6 has been added to the already high
price of coal because the poorer mines are alleged
not to be paying their way, 21% of the output ex-
amined by the Commission was produced at a
profit of i/- to 3/- per ton, 32% at a profit of 3/- to
S/"j 13% ^t ^ profit of 5/- to 7/-, and 14% at a
profit of 7/- per ton and over, while the profits of
distributors in London alone amount in the aggregate
to over 3^500,000, and the co-operative movement,
which aims not at profit, but at service, distributes
household coal at a cost of from 2/- to 4/- less per
ton than is charged by the coal trade !*

" But these are exceptions." They may be. It
is possible that in the industries, in which, as the
recent Committee on Trusts has told us, " powerful
Combinations or Consolidations of one kind or
another are in a position effectively to control out-
put and prices," not only costs are cut to the bare
minimum but profits are inconsiderable. But then
why insist on this humiliating tradition of secrecy
with regard to them, when everyone who uses
their products, and everyone who renders honest
service to production, stands to gain by publicity ?
If industry is to become a profession, whatever its

* Coal Industry Commission, Minutes of Evidence, 9261-9.

i6o THE ACQUISITIVE SOCIETY

management, the first of its professional rules
should be, as Sir John Mann told the Coal Com-
mission, that " all cards should be placed on the
table." If it were the duty of a Public Depart-
ment to publish quarterly exact returns as to costs
of production and profits in all the firms through-
out an industry, the gain in mere productive
efficiency, which should appeal to our enthusiasts
for output, would be considerable ; for the organiz-
ation whose costs were least would become the
standard with which all other types of organization
would be compared. The gain in morale, which is
also, absurd though it may seem, a condition of
efficiency, would be incalculable. For industry
would be conducted in the light of day. Its costs,
necessary or unnecessary, the distribution of the
return to it, reasonable or capricious, would be a
matter of common knowledge. It would be held
to its purpose by the mere impossibility of .per-
suading those who make its products or those who
consume them to acquiesce, as they acquiesce now,
in expenditure which is meaningless because it has
contributed nothing to the service which the in-
dustry exists to perform.

The organization of industry as a profession does
not involve only the abolition of functionless pro-
perty, and the maintenance of publicity as the
indispensable condition of a standard of profession-
al honour. It implies also that those who perform
its work should undertake that its work is per-
formed effectively. It means that they should not
merely be held to the service of the public by fear of
personal inconvenience or penalties, but that they
should treat the discharge of professional re-

THE "VICIOUS CIRCLE" i6i

sponsibilities as an obligation attaching not only to
a small elite of intellectuals, managers or " bosses,"
who perform the technical work of " business
management," but as implied by the mere entry
into the industry and as resting on the corporate
consent and initiative of the rank and file of workers.
It is precisely, indeed, in the degree to which that
obligation is interpreted as attaching to all workers,
and not merely to a select class, that the difference
between the existing industrial order, collectivism
and the organization of industry as a profession
resides. The first involves the utilization of human
beings for the purpose of private gain ; the second
their utilization for the purpose of public service ;
the third the asssociation in the service of the
public of their professional pride, solidarity and
organization.

The difference in administrative machinery
between the second and third might not be con-
siderable. Both involve the drastic limitation,
or the transference to the public, of the proprietary
rights of the existing owners of industrial capital.
Both would necessitate machinery for bringing the
opinion of the consumers to bear upon the service
supplied them by the industry. The difference
consists in the manner in which the obligations of
the producer to the public are conceived. He may
either be the executant of orders transmitted to
him by its agents ; or he may, through his organiz-
ation, himself take a positive part in determining
what those orders should be.

In the former case he is responsible for his own
work, but not for anything else. If he hews his
stint of coal, it is no business of his whether the pit

i62 THE ACQUISITIVE SOCIETY

is a failure ; if he puts in the normal number of
rivets, he disclaims all further interest in the price
or the seaworthiness of the ship. In the latter his
function embraces something more than the per-
formance of the specialized piece of work allotted
to him. It includes also a responsibility for the
success of the undertaking as a whole. And since
responsibility is impossible without power, his
position would involve at least so much power as is
needed to secure that he can affect in practice the
conduct of the industry. It is this collective Ha-
bility for the maintenance of a certain quality of
service which is, indeed, the distinguishing feature
of a profession. It is compatible with several
different kinds of government, or indeed, when the
unit of production is, not a group, but an individual,
with hardly any government at all. What it does
involve is that the individual, merely by entering
the profession, should have committed himself to
certain obligations in respect of its conduct, and
that the professional organization, whatever it may
be, should have sufficient power to enable it to
maintain them.

The demand for the participation of the workers
in the control of industry is usually advanced in the
name of the producer, as a plea for economic free-
dom or industrial democracy. " Political freedom,"
writes the Final Report of the United States Com-
mission on Industrial Relations, which was presen-
ted in 1 91 6, " can exist only where there is in-
dustrial freedom. . . . There are now within the
body of our Republic industrial communities
which are virtually Principalities, oppressive to
those dependent upon them for a livelihood and a

THE " VICIOUS CIRCLE " 163

dreadful menace to the peace and welfare of the
nation." The vanity of Englishmen may soften
the shadows and heighten the lights. But the
concentration of authority is too deeply rooted in
the very essence of Capitalism for differences in the
degree of the arbitrariness with which it is exer-
cised to be other than trivial. The control of a
large works does, in fact, confer a kind of private
jurisdiction in matters concerning the life and liveli-
hood of the workers, which, as the United States'
Commission suggests, may properly be described as
" industrial feudalism." It is not easy to under-
stand how the traditional liberties of Englishmen
are compatible with an organization of industry
which, except in so far as it has been qualified by the
law or by trade unionism, permits populations almost
as large as those of some famous cities of the past
to be controlled in their rising up and lying down, in
their work, economic opportunities, and social life
by the decisions of a Committee of half-a-dozen
Directors.

The most conservative thinkers recognize that
the present organization of industry is intolerable
in the sacrifice of liberty which it entails upon the
producer. But each effort which he makes to
emancipate himself is met by a protest that, if the
existing system is incompatible with freedom, it at
least secures efficient service, and that efficient
service is threatened by movements which aim at
placing a greater measure of industrial control in
the hands of the workers. The attempt to drive a
wedge between the producer and the consumer is
obviously the cue of all the interests which are
conscious that by themselves they are unable to

i64 THE ACQUISITIVE SOCIETY

hold back the flood. It is natural, therefore, that
during the last two years they should have concen-
trated their efforts upon representing that every
advance in the demands and in the power of any
particular group of workers is a new imposition
upon the general body of the public Eminent
persons, who are not obviously producing more
than they consume, explain to the working classes
that unless they produce more they must consume
less. Highly syndicated combinations warn the
public against the menace of predatory syndicalism.
The owners of mines and minerals, in their new
role as protectors of the poor, lament the " selfish-
ness " of the miners, as though nothing but pure
philanthropy had hitherto caused profits and
royalties to be reluctantly accepted by themselves.
The assumption upon which this body of argu-
ment rests is simple. It is that the existing organ-
ization of industry is the safeguard of productive
efficiency, and that from every attempt to alter it
the workers themselves lose more as consumers than
they can gain as producers. The world has been
drained of its wealth and demands abundance of
goods. The workers demand a larger income,
greater leisure, and a more secure and dignified
status. These demands, it is argued, are con-
tradictory. For how can the consumer be
supplied with cheap goods, if, as a worker, he insists
on higher wages and shorter hours ? And how can
the worker secure these conditions, if as a con-
sumer, he demands cheap goods ? So industry, it
is thought, moves in a vicious circle of shorter
hours and higher wages and less production, which
in time must mean longer hours and lower wages ;

THE "VICIOUS CIRCLE" 165

and every one receives less, because every one
demands more.

The picture is plausible, but it is fallacious. It
is fallacious not merely in its crude assumption that
a rise in wages necessarily involves an increase in
costs, but for another and more fundamental
reason. In reality the cause of economic confusion
is not that the demands of producer and consumer
meet in blunt opposition ; for, if they did, their
incompatibility, when they were incompatible,
would be obvious, and neither could deny his re-
sponsibility to the other, however much he might
seek to evade it. It is that they do not, but that,
as industry is organized to-day, what the worker
foregoes the general body of consumers does not
necessarily gain, and what the consumer pays the
general body of workers does not necessarily
receive. If the circle is vicious, its vice is not that
it is closed, but that it is always half open, so that
part of production leaks away in consumption
which adds nothing to productive energies, and that
the producer, because he knows this, does not fully
use even the productive energy which he commands.

It is the consciousness of this leak which sets
every one at cross purposes. No conceivable
system of industrial organization can secure in-
dustrial peace, if by " peace " is meant a complete
absence of disagreement. What could be secured
would be that disagreements should not flare up
into a beacon of class warfare. If every member of
a group puts something into a common pool on
condition of taking something out, they may still
quarrel about the size of the shares, as children
quarrel over cake ; but, if the total is known and

i66 THE ACQUISITIVE SOCIETY

the claims admitted, that is all they can quarrel
about, and, since they all stand on the same foot-
ing, any one who holds out for more than his
fellows must show some good reason why he should
get it. But in industry the claims are not all ad-
mitted, for those who put nothing in demand to
take something out ; both the total to be divided
and the proportion in which the division takes
place are sedulously concealed ; and those who
preside over the distribution of the pool and control
what is paid out of it have a direct interest in
securing as large a share as possible for themselves
and in allotting as small a share as possible to
others. If one contributor takes less, so far from
it being evident that the gain will go to some one
who has put something in and has as good a right
as himself, it may go to some one who has put in
nothing and has no right at all. If another claims
more, he may secure it, without plundering a
fellow-worker, at the expense of a sleeping partner
who is believed to plunder both. In practice, since
there is no clear principle determining what they
ought to take, both take all they can get.

In such circumstances denunciations of the
producer for exploiting the consumer miss the mark.
They are inevitably regarded as an economic ver-
sion of the military device used by armies which
advance behind a screen of women and children,
and then protest at the brutality of the enemy in
shooting non-combatants. They are interpreted as
evidence, not that a section of the producers are
exploiting the remainder, but that a minority of
property-owners, which is in opposition to both, can
use its economic power to make efforts directed

THE "VICIOUS CIRCLE" 167

against those who consume much and produce little
rebound on those who consume httle and produce
much. And the grievance, of which the Press
makes so much, that some workers may be taking
too large a share compared with others, is masked
by the much greater grievance, of which it says
nothing whatever, that some idlers take any share
at all.

The abolition of payments which are made with-
out any corresponding economic service is thus one
of the indispensable conditions both of economic
efficiency and industrial peace, because their ex-
istence prevents different classes of workers from
restraining each other, by uniting them all
against the common enemy. Either the principle
of industry is that of function, in which case slack
work is only less immoral than no work at all ; or
it is that of grab, in which case there is no morality
in the matter. But it cannot be both. And it is
useless either for property-owners or for Govern-
ments to lament the mote in the eye of the trade
unions, as long as, by insisting on the maintenance
of functionless property, they decline to remove the
beam in their own.

The truth is that only workers can prevent the
abuse of power by workers, because only workers
are recognized as possessing any title to have their
claims considered. And the first step to prevent-
the exploitation of the consumer by the producer is
simple. It is to turn all men into producers, and
thus to remove the temptation for particular
groups of workers to force their claims at the ex-
pense of the public, by removing the valid excuse
that such gains as they may get are taken from

i68 THE ACQUISITIVE SOCIETY

those who at present have no right to them,
because they are disproportionate to service or
obtained for no service at all. Indeed, if work
were the only title to payment, the danger of the
community being exploited by highly organized
groups of producers would largely disappear. For
when no payments were made to non-producers,
there would be no debatable ground for which to
struggle, and it would become evident that if
one group of producers took more, another must
put up with less.

Under such conditions a body of workers who
used their strategic position to extort extravagant
terms for themselves at the expense of their fellow-
workers might properly be described as exploiting
the community. But at present such a statement
is meaningless. -It is meaningless because, before
the community can be exploited, the community
must exist, and its existence in the sphere of econ-
omic relations is to-day, not a fact, but only an aspir-
ation. The procedure by which, whenever any section
of workers advance demands which are regarded
as inconvenient by their masters, they are de-
nounced as a band of anarchists who are preying on
the public, may be a convenient weapon in an
emergency, but, once it is submitted to analysis,
it is logically self-destructive. It has been applied
within recent years, to the postmen, to the engineers,
to the policemen, to the miners and to the railway
men, a population with their dependents, of some
eight million persons ; and in the case of the last
two the whole body of organized labour made
common cause with those of whose exorbitant
demands it was alleged to be the victim. But

i

THE "VICIOUS CIRCLE" 169

when these workers and their sympathizers are
deducted, what is " the community " which re-
mains ? It is a naive arithmetic which produces a
total by subtracting one by one all the items
which compose it ; and the art which discovers the
public interest by eliminating the interests of
successive sections of the public smacks of the
rhetorician rather than of the statesman.

The truth is that at present it is idle to seek to
resist the demands of any group of workers by
appeals to " the interests of society," because to-
day, as long as the economic plane alone is con-
sidered, there is not one society but two, which
dwell together in uneasy juxtaposition, like Sinbad
and the Old Man of the Sea, but which in spirit, in
ideals, and in economic interest, are worlds asunder.
There is the society of those who live by labour,
whatever their craft or profession, and the society
of those who live on it. And the latter cannot
command the sacrifices or the loyalty which are due
to the former, for they have no title which will
bear inspection.

The instinct to ignore that tragic division in-
instead of ending it is amiable, and sometimes
generous. But it is a sentimentality which is like
the morbid optimism of the consumptive who dares
not admit even to himself the virulence of his
disease. As long as the division exists, the general
body of workers, while it may suffer from the
struggles of any one group within it, nevertheless
supports them by its sympathy, because all are
interested in the results of the contest carried on by
each. Different sections of workers will exercise
mutual restraint only when the termination of the

170 THE ACQUISITIVE SOCIETY

struggle leaves them face to face with each other,
and not as now, with the common enemy. The
ideal of a united society in which no one group uses
its power to encroach upon the standards of another
is, in short, unattainable, except through the
preliminary abolition of functionless property.

Those to whom a leisure class is part of an im-
mutable order without which civilization is incon-
ceivable, dare not admit, even to themselves, that
the world is poorer, not richer, because of its
existence. So, when, as now, it is important that
productive energy should be fully used, they stamp
and cry, and write to ^he Times about the necessity
for increased production, though all the time they
themselves, their way of life and expenditure, and
their very existence as a leisure class, are among the
causes why production is not increased. In all
their economic plans they make one reservation,
that, however necessitous the world may be, it
shall still support them. But men who work do not
make that reservation, nor is there any reason why
they should ; and appeals to them to produce more
wealth because the public needs it usually fall upon
deaf ears, even when such appeals are not involved
in the ignorance and misapprehensions which
often characterize them.

For the workman is not the servant of the con-
sumer, for whose sake the greater production is
demanded, but of shareholders, whose primary aim
is dividends, and to whom all production, however
futile or frivolous, so long as it yields dividends, is
the same. It is useless to urge that he should
produce more wealth for the community, unless at
the same time he is assured that it is the community

I

THE ^'VICIOUS CIRCLE" 171

which will benefit in proportion as more wealth is
produced. If every unnecessary charge upon coal-
getting had been eliminated, it would be reasonable
to ask that the miners should set a much needed
example to the business community, by refusing
to extort better terms for themselves at the
expense of the public. But there is no reason
why they should work for lower wages or longer
hours as long as those who are to-day responsible
for the management of the industry conduct it
with " the extravagance and waste " stigmatized
by the most eminent official witness before the
Coal Commission, or why the consumer should
grumble at the rapacity of the miner as long as he
allows himself to be mulcted by swollen profits, the
costs of an ineffective organization, and unnecess-
ary payments to superfluous middlemen.

If to-day the miner or any other workman pro-
duces more, he has no guarantee that the result
will be lower prices rather than higher dividends
and larger royalties, any more than, as a workman,
he can determine the quality of^the wares which
his employer supplies to customers, or the price at
which they are sold. Nor, as long as he is directly
the servant of a profit-making company, and only
indirectly the servant of the community, can any
such guarantee be offered him. It can be offered
only in so far as he stands in an immediate and
direct relation to the public for whom industry is
carried on, so that, when all costs have been met,any
surplus will pass to it, and not to private individ-
uals. It will be accepted only in so far as the
workers in each industry are not merely servants
executing orders, but themselves have a collective

I

172 THE ACQUISITIVE SOCIETY

responsibility for the character of the service, and
can use their organizations, not merely to protect
themselves against exploitation, but to make
positive contributions to the administration and
development of their industry.

IX

THE NEW CONDITION OF EFFICIENCY

Thus it is not only for the sake of the producers, on
whom the old industrial order weighed most heav-
ily, that a new industrial order is needed. It is
needed for the sake of the consumers, because the
ability on which the old industrial order prided
itself most and which is flaunted most as an argu-
ment against change, the abihty to serve them
effectively, is itself visibly breaking down. It is
breaking down at what was always its most vulner-
able point, the control of the human beings whom,
with characteristic indifference to all but their
economic significance, it distilled for its own pur-
poses into an abstraction called " Labour." The
first symptom of its collapse is what the first
symptom of economic collapses has usually been in
the past — the failure of customary stimuli to evoke
their customary response in human effort.

(a) The Passing of Authority from the Capitalist,

Till that failure is recognized and industry re-
organized so that new stimuli may have free play,
the collapse will not correct itself, but, doubtless
with spasmodic revivals and flickering energy, will
continue and accelerate. The cause of it is simple.
It is that those whose business it is to direct
economic activity are increasingly incapable of
directing the men upon whom economic activity

173

174 THE ACQUISITIVE SOCIETY

depends. The fault is not that of individuals, but
of a system, of Industrialism itself. During the
greater part of the nineteenth century industry
was driven by two forces, hunger and fear, and the
employer commanded them both. He could grant
or withhold employment as he pleased. If men
revolted against his terms he could dismiss them,
and, if they were dismissed, what confronted them
was starvation or the workhouse. Authority was
centralized ; its instruments were passive ; the one
thing which they dreaded was unemployment.
And since they could neither prevent its occurrence
nor do more than a little to mitigate its horrors
when it occurred, they submitted to a discipline
which they could not resist, and industry pursued
its course through their passive acquiescence in a
power which could crush them individually if they
attempted to oppose it.

That system might be lauded as efficient or de-
nounced as inhuman. But, at least, as its admirers
were never tired of pointing out, it worked. And,
like the Prussian State, which alike in its virtues and
deficiencies it not a little resembled, as long as it
worked it survived denunciations of its methods, as
a strong man will throw off a disease. But to-day
it is ceasing to have even the qualities of its defects.
It is ceasing to be efficient. It no longer secures
the ever-increasing output of wealth which it
offered in its golden prime, and which enabled it to
silence criticism by an imposing spectacle of ma-
terial success. Though it still works, it works un-
evenly, amid constant friction and jolts and
stoppages, without the confidence of the public
and without full confidence even in itself. It is a

THE NEW CONDITION OF EFFICIENCY 175

tyrant who must intrigue and cajole where for-
merly he commanded, a gaoler who, if not yet de-
prived of the whip, dare only administer moderate
chastisement, and who, though he still protests
that he alone can keep the treadmill moving and
get the corn ground, is compelled to surrender
so much of his authority as to make it questionable
whether he is worth his keep.

For the instruments through which Capitalism
exercised discipline are one by one being taken
from it. It cannot pay what wages it likes or
work what hours it likes. For several years it
has been obliged to accept the control of
prices and profits. In well-organized industries
the power of arbitrary dismissal, the very centre
of its authority, is being shaken, because men
will no longer tolerate a system which makes their
livelihood dependent on the caprices of an individ-
ual. In all industries alike the time is not far
distant when the dread of starvation can no longer
be used to cow dissatisfied workers into submission,
because the public will no longer allow involuntary
unemployment to result in starvation.

The last point is of crucial importance. It is
the control of the workers' will through the control
of his livelihood which has been in the past the
master weapon of economic tyranny. Both its
champions and its opponents know it. In 191 9,
when the world of Labour was in motion, there were
some employers who looked to the inevitable re-
currence of bad trade " to teach them reason." Now
that bad trade has come, and with it the misery of
unemployment, there are some employers who say
that the immediate loss will be more than counter-

176 THE ACQUISITIVE SOCIETY

balanced if the lesson which the older generation had
learned, and which was half forgotten during the
war, is impressed upon the young men who grew
up between 1914 and 1920. Let them once realise
what it is not to be wanted, and, except for an
occasional outburst, they will come to heel for the
rest of their lives.

The calculation is superficial, since the fear
of unemployment is one potent cause of indus-
trial malaise and of the slackening of pro-
duction. The building operative whose job is
drawing towards its close, and who in the past
has had to tramp the streets for months in
search of another, may think that he has a
duty to his employer, but he reflects that he
has a prior duty to his wife and children. So
he " makes the job last " ; and he is right.
As an expedient for the moment, however,
unemployment may be an effective weapon —
provided that the young men will follow their
fathers' example, and treat it as the act
of God, not as a disease accompanying a
particular type of industrial organization. But
will they ? It is too early yet to answer that ques-
tion. It seems clear, however, that the whole
repulsive body of assumptions, which made it
seem natural to use the mass of workers as instru-
ments to be picked up when there was work and
to be laid aside when there was not, is finding in-
creasing difficulty in meeting the criticism directed
against it. In the impressive words of Lord Shaw,
** if men were merely the spare parts of an industrial
machine, this callous reckoning might be appro-
priate ; but Society will not much longer tolerate

THE NEW CONDITION OF EFFICIENCY 177

the employment of human beings on those lines."*
What the trade unions are beginning to demand,
and what they are likely to demand with increasing
insistence in the future, is that their members
shall be treated as " on the strength " of their
respective industries, and that, if an industry
requires workers when it is busy, it shall accumulate
in good times the reserves needed to maintain
those workers when it is slack. The Building
Guilds have adopted that principle. The Committee
of employers and trade unionists presided over by
Mr. Foster recommended a scheme which was,
in essence, the same. The striking programme
submitted by Mr. Bevin to the Transport Workers'
Federation proposes that the whole of the 125,000
workers to be registered as members of the industry
shall be guaranteed a regular wage of ^^4 a week
throughout the year, provided they present them-
selves for employment, and that the cost shall be
met by a levy of 4d. a ton on imports and exports.
The provisions for " contracting out " under the
Unemployment Insurance Act, unsatisfactory
though they are, are a step towards the adoption
of schemes which will treat the payment of regular
wages to the workers in each industry, work or
play, as part of the normal " costs " which the
return to the industry must cover. Now that the
principle of maintenance has been recognised,
however inadequately, by legislation, its applica-
tion is likely to be extended from the exiguous
benefit at present provided to the payment of a
sum which will, in effect, be a standing wage,

♦Report of Lord Shaw's Court of Inquiry concerning Trans-
port Workers, 1920.

178 THE ACQUISITIVE SOCIETY

payable in bad times as in good, to all workers
normally engaged in each industry.

In proportion as that result is achieved, Capital-
ism will be unable to appeal to the terror of un-
employment which has been in the past its most
powerful instrument of economic discipline. And its
prestige will vanish with its power. Indeed it is
vanishing already. For if Capitalism is losing its
control of men's bodies, still more has it lost its
command of their minds. The product of a civiliza-
tion which regarded " the poor " as the instruments,
at worst of the luxuries, at best of the virtues, of the
rich, its psychological foundation fifty years ago
was an ignorance in the mass of mankind which
led them to reverence as wisdom the very follies
of their masters, and an almost animal incapacity
for responsibility. Education and experience have
destroyed the passivity which was the condition
of the perpetuation of industrial government in the
hands of an oligarchy of private capitalists. The
workman of to-day has as little belief in the in-
tellectual superiority of many of those who direct
industry as he has in the morality of the system.
It appears to him to be not only oppressive, but
wasteful, unintelligent and inefficient. In the
light of his own experience in the factory and the
mine, he regards the claim of the capitalist to be the
self-appointed guardian of public interests as a
piece of sanctimonious hypocrisy. For he sees
every day that efficiency is sacrificed to short-
sighted financial interests ; and while as a man he is
outraged by the inhumanity of the industrial order,
as a professional who knows the difference between
good work and bad he has a growing contempt at

THE NEW CONDITION OF EFFICIENCY 1 79

once for its misplaced parsimony and its misplaced
extravagance, for the whole apparatus of adulter-
ation, advertisement and quackery which seems in-
separable from the pursuit of profit as the main
standard of industrial success.

So Capitalism no longer secures strenuous work
by fear, for it is ceasing to be formidable. And it
cannot secure it by respect, for it has ceased to be
respected. And the very victories by which it
seeks to reassert its waning prestige are more dis-
astrous than defeats. Employers may congratulate
themselves that they have maintained intact their
right to freedom of management, or opposed
successfully a demand for public ownership, or
broken a movement for higher wages and shorter
hours. But what is success in a trade dispute or in
a political struggle is often a defeat in the work-
shop. The workmen may have lost, but it does not
follow that their employers, still less that the public,
which is principally composed of workmen, have
won.

For the object of industry is to produce goods,
and to produce them at the lowest cost in human
effort. But there is no alchemy which will secure
efficient production from the resentment or distrust
of men who feel contempt for the order under which
they work. It is a commonplace that credit is the
foundation of industry. But credit is a matter of
psychology, and the workman has his psychology as
well as the capitalist. If confidence is necessary
to the investment of capital, confidence is not less
necessary to the effective performance of labour by
men whose sole livelihood depends upon it. If
they are not yet strong enough to impose their will.

i8o THE ACQUISITIVE SOCIETY

they are strong enough to resist when their masters
would impose theirs. They may work rather than
strike. But they will work to escape dismissal,
not for the greater glory of a system in which they
do not believe ; and, if they are dismissed, those
who take their place will do the same.

That this is one cause of a low output has "been
stated both by employers and workers in the
building industry, and by the representatives of the
miners before the Coal Commission. It was re-
iterated with impressive emphasis by Mr. Justice
Sankey. Nor is it seriously contested by employers
themselves. What else, indeed, do their repeated
denunciations of " restriction of output " mean,
except that they have failed to organize industry so
as to secure the efficient service which it is their
special function to provide ? Nor is it appro-
priate to the situation to indulge in full-blooded
denunciations of the " selfishness " of the working
classes. " To draw an indictment against a whole
nation " is a procedure which is as impossible in
industry as it is in politics. Institutions must be
adapted to human nature, not human nature to
institutions. If the effect of the industrial system
is such that a large and increasing number of
ordinary men and women find that it offers them
no adequate motive for economic effort, it is mere
pedantry to denounce men and women instead of
amending the system.

Thus the time has come when absolutism in in-
dustry may still win its battles, but loses the cam-
paign, and loses it on the very ground of economic
efficiency which was of its own selection. In the
period of transition, while economic activity is

THE NEW CONDITION OF EFFICIENCY i8i

distracted by the struggle between those who have
the name and habit of power, but no longer the
full reality of it, and those who are daily winning
more of the reality of power but are not yet its
recognized repositories, it is the consumer who
suffers. He has neither the service of docile
obedience, nor the service of intelligent co-operation.
For slavery will work — as long as the slaves will let
it ; and freedom will work when men have learned
to be free ; but what will not work is a combination
of the two. So the public goes short of coal, not
only because of the technical deficiencies of the
system under which it is raised and distributed, but
because the system itself has lost its driving force
— because the mine owners can no longer persuade
the miners into producing more dividends for them-
selves and more royalties for the owners of minerals,
while the public cannot appeal to them to put
their whole power into serving itself, because it has
chosen that they should be the servants, not of
itself, but of shareholders.

And this dilemma is not, as some suppose, tem-
porary, the aftermath of war, or peculiar to the
coal industry, as though the miners alone were the
children of sin which in the last two years they
have been described to be. It is permanent ; it has
spread far ; and, as sleeping spirits are stirred into
life by education and one industry after another
develops a strong corporate consciousness, it will
spread further. Nor will it be resolved by lament-
ations or menaces or denunciations of leaders whose
only significance is that they say openly what plain
men feel privately. For the matter at bottom is one
of psychology. What has happened is that the mot-

1 82 THE ACQUISITIVE SOCIETY

ives on which the industrial system relied for several
generations to secure efficiency, secure it no longer.
And it is as impossible to restore them, to revive by
mere exhortation the complex of hopes and fears
and ignorance and patient credulity and passive
acquiescence, which together made men, fifty
years ago, plastic instruments in the hands of
industrialism, as to restore innocence to any others
of those who have eaten of the tree of knowledge.

The ideal of some intelligent and respectable
business men, the restoration of the golden sixties,
when workmen were docile and confiding, and trade
unions were still half illegal, and foreign competition
meant English competition in foreign countries, and
prices were rising a little and not rising too much, is
the one Utopia which can never be realized. The
King may walk naked as long as his courtiers pro-
test that he is clad ; but when a child or a fool has
broken the spell a tailor is more important than all
their admiration. If the public, which suffers from
the slackening of economic activity, desires to end
its malaise, it will not laud as admirable and all-
sufficient the operation of motives which are
plainly ceasing to move. It will seek to liberate new
motives and to enlist them in its service. It will
endeavour to find an alternative to incentives
which were always degrading, to those who used
them as much as to those upon whom they were
used, and which now are adequate incentives no
longer. And the alternative to the discipline which
Capitalism exercised through its instruments of
unemployment and starvation is the self-discipline
of responsibility and professional pride.

So the demand which aims at stronger organiz-

THE NEW CONDITION OF EFFICIENCY 183

ation, fuller responsibility, larger powers for the
sake of the producer as a condition of economic
liberty, the demand for freedom, is not antithetic
to the demand for more effective work and increas-
ed output which is being made in the interests of
the consumer. It is complementary to it, as the
insistence by a body of professional men, whether
doctors or university teachers, on the maintenance
of their professional independence and dignity
against attempts to cheapen the service is not
hostile to an efficient service, but, in the long run,
a condition of it.

The course of wisdom for the consumer would be
to hasten, so far as he can, the transition. For, as
at present conducted, industry is working against
the grain. It is compassing sea and land in its
efforts to overcome, by ingenious financial and
technical expedients, obstacles which should never
have existed. It is trying to produce its results by
conquering professional feeling instead of by using it.
It is carrying not only its inevitable economic bur-
dens, but an ever increasing load of ill-will and
scepticism. It has, in fact, '*" shot the bird which
caused the wind to blow " and goes about its
business with the corpse round its neck. Com-
pared with that psychological incubus, the technical
deficiencies of industry, serious though they often
are, are a bagatelle, and the business men who
preach the gospel of production without offering
any plan for dealing with what is now the central
fact in the economic situation, resemble a Christian
apologist who should avoid disturbing the equan-
imity of his audience by carefully omitting all refer-
ence either to the fall of man or to the scheme of

i84 THE ACQUISITIVE SOCIETY

salvation. If it is desired to increase the output
of wealth, it is not a paradox, but the statement of
an elementary economic truism to say that active
and constructive co-operation on the part of the
rank and file of workers would do more to contribute
to that result than the discovery of a new coal-
field or a generation of scientific invention.

(b) The Appeal to Professional Feeling.

The first condition of enlisting on the side of con-
structive work the professional feeling which is now
apathetic, or even hostile to it, is to secure that,
when it is given, its results accrue to the public, not
to the owner of property in capital, in land, or in
other resources. For this reason the attenuation of
the rights at present involved in the private owner-
ship of industrial capital, or their complete aboli-
tion, is not the demand of idealogues, but an in-
dispensable element in a policy of economic effic-
iency, since it is the condition of the most effective
functioning of the human beings upon whom,
though, like other truisms, it is often forgotten,
economic efficiency ultimately depends. But it is
only one element. Co-operation may range from
mere acquiescence to a vigilant and zealous in-
itiative. The criterion of an effective system of
administration is that it should succeed in enlisting
in the conduct of industry the latent forces of
professional pride to which the present industrial
order makes little appeal, and which, indeed.
Capitalism, in its war upon trade union organization,
endeavoured for many years to stamp out altogether.

Nor does the efficacy of such an appeal repose
upon the assumption of that *' change in human

THE NFAV CONDITION OF EFFICIENCY 185

nature," which is the triumphant reductio ad absur-
dum advanced by those who are least satisfied with
the working of human nature as it is. What it does
involve is that certain elementary facts should be
taken into account, instead of, as at present, being
ignored. That all work is distasteful, and that
" every man desires to secure the largest income
with the least effort," may be as axiomatic as it is
assumed to be. But in practice it makes all the
difference to the attitude of the individual whether
the collective sentiment of the group to which he
belongs is on the side of effort or against it, and
what standard of effort it sets. That, as employers
complain, the public opinion of considerable
groups of workers is against an intensification of
effort as long as part of its result is increased
dividends for shareholders, is, no doubt, as far as
mere efficiency is concerned, the gravest indict-
ment of the existing industrial order. But, even
when public ownership has taken the place of
private capitalism, its ability to command effective
service will depend ultimately upon its success in
securing, not merely that professional feeling is no
longer an opposing force, but that it is actively
enlisted upon the side of maintaining the highest
possible standard of efficiency which can reasonably
be demanded.

To put the matter concretely, while the existing
ownership of mines is a positive inducement to
inefficient work, public ownership administered by
a bureaucracy, if it would remove the technical
deficiencies emphasized by Sir Richard Redmayne
as inseparable from the separate administration of
3,000 pits by 1,500 different companies, would be

1 86 THE ACQUISITIVE SOCIETY

only too likely to miss a capital advantage which
a different type of administration would secure.
It would lose both the assistance to be derived
from the technical knowledge of practical men who
know by daily experience the points at which the
details of administration can be improved, and the
stimulus to efficiency springing from the corporate
pride of a profession which is responsible for main-
taining and improving the character of its service.

Professional spirit is a force like gravitation,
which in itself is neither good nor bad, but which
the engineer uses, when he can, to do his work for
him. If it is foolish to idealize it, it is equally
shortsighted to neglect it. In what are described
par excellence as " the services " it has always been
recognized that esprit de corps is the foundation of
efficiency, and all means, some wise and some mis-
chievous, are used to encourage it ; in practice,
indeed, the power upon which the country relied
as its main safeguard in an emergency was the
professional zeal of the navy and nothing else. Nor
is that spirit peculiar to the professions which are
concerned with war. It is a matter of common
training, common responsibilities, and common
dangers. In all cases where difficult and disagree-
able work is to be done, the force which elicits it is
normally not merely money, but the public opinion
and tradition of the little society in which the
individual moves, and in the esteem of which he
finds that which men value in success.

To ignore that most powerful of stimuli as it is
ignored to-day, and then to lament that the efforts
which it produces are not forthcoming, is the
height of perversity. To aim at eliminating from

THE NEW CONDITION OF EFFICIENCY 187

industry the growth and action of corporate feeUng,
for fear lest an organized body of producers should
exploit the public, is a plausible policy. But it is
short-sighted. It is " to pour away the baby with
the bath," and to lower the quality of the service
in an attempt to safeguard it. A wise system of
administration would recognize that professional
solidarity can do much of its work for it more
effectively than it can do it itself, because the
spirit of his profession is part of the individual and
not a force outside him, and it would make it its
object to enlist that temper in the public service.
It is only by that policy, indeed, that the elabora-
tion of cumbrous regulations to prevent men doing
what they should not, with the incidental result of
sometimes preventing them from doing what they
should — it is only by that policy that what is
mechanical and obstructive in bureaucracy can be
averted. For industry cannot run without laws.
It must either control itself by professional stand-
ards, or it must be controlled by officials who are
not of the craft, and who, however zealous and well-
meaning, can hardly have the feel of it in their
fingers. Public control and criticism are indispens-
able. But they should not be too detailed, or they
defeat themselves. It would be better that, once
fair standards have been established, the profession-
al organization should check offences against prices
and quality than that it should be necessary for the
State to do so. The alternative to minute external
supervision is supervision from within by men who
become imbued with the public obligations of their
trade in the very process of learning it. It is, in
short, professionalism in industry.

1 88 THE ACQUISITIVE SOCIETY

For this reason collectivism by itself is too simple
a solution. Its failure is likely to be that of other
rationalist systems.

**Dann hat er die Theile in seiner Hand,
Fehlt leider! nur das geistige Band."
If industrial reorganization is to be a living reality,
and not merely a plan upon paper, its aim must be
to secure not only that industry is carried on for
the service of the public, but that it shall be carried
on with the active co-operation of the organizations
of producers. But co-operation involves responsi-
bility, and responsibility involves power. It is
idle to expect that men will give their best to any
system which they do not trust, or that they will
trust any system in the control of which they do
not share. Their ability to carry professional
obligations depends upon the power which they
possess to remove the obstacles which prevent those
obligations from being discharged, and upon their
willingness, when they possess the power, to use it.

Two causes appear to have hampered the com-
mittees which were established in connection with
coal mines during the war to increase the output
of coal. One was the reluctance of some of them to
discharge the invidious task of imposing penalties
for absenteeism on their fellow-workmen. The
other was the exclusion of faults of management
from the control of many committees. In some
cases all went well till they demanded that, if the
miners were penalized for absenteeism which was
due to them, the management should be penalized
similarly when men who desired to work were sent
home, because, as the result of defective organiza-
tion, there was no work for them to do. Their

I

THE NEW CONDITION OF EFFICIENCY 189

demand was resisted as " interference with the
management," and the attempt to enforce regular-
ity of attendance broke down. Nor, to take an-
other example from the same industry, is it to be
expected that the weight of the miners' organization
will be thrown on to the side of greater production,
if it has no power to insist on the removal of the
defects of equipment and organization, the shortage
of trams, rails, tubs and timber, the " creaming "
of the pits by the working of easily got coal to
their future detriment, their wasteful lay-out
caused by the vagaries of separate ownership, by
which at present the output is reduced.

The public cannot have it both ways. If it
allows workmen to be treated as " hands ", it can-
not claim the service of their wills and their brains.
If it desires them to show the zeal of skilled profes-
sionals, it must secure that they have sufficient
power to allow of their discharging professional
responsibihties. In order that workmen may abol-
ish any restrictions on output which may be im-
posed by them, they must be able to insist on the
abolition of the restrictions, more mischievous be-
cause more effective, which, as the Committee on
Trusts has recently told us, are imposed by organ-
izations of employers. In order that the miners'
leaders, instead of merely bargaining as to wages,
hours and working conditions, may be able to
appeal to their members to increase the supply of
coal, they must be in a position to secure the re-
moval of the causes of low output which are due to
the deficiencies of the management, and which are
to-day a far more serious obstacle than any re-
luctance on the part of the miner. If the workmen

I90 THE ACQUISITIVE SOCIETY

in the building trades are to take combined action
to accelerate production, they must as a body be
consulted as to the purpose to which their energy is
to be applied, and must not be expected to build
fashionable houses, when what are required are
six-roomed cottages to house families which are at
present living three persons to a room.

It is deplorable, indeed, that any human beings
should consent to degrade themselves by producing
the articles which a considerable number of work-
men turn out to-day, boots which are partly brown
paper, and furniture which is not fit to use. The
revenge of outraged humanity is certain, though it
is not always obvious ; and the penalty paid by
the consumer for tolerating an organization of
industry which, in the name of efficiency, destroyed
the responsibility of the workman, is that the
service with which he is provided is not even
efficient. He has always paid it, though he has not
seen it, in quality. To-day he is beginning to
realize that he is likely to pay it in quantity as well.
If the public is to get efficient service, it can get it
only from human beings, with the initiative and
caprices of human beings. It will get it, in short,
in so far as it treats industry as a responsible
profession.

The collective responsibility of the workers for
the maintenance of the standards of their profes-
sion is, then, the alternative to the discipline which
Capitalism exercised in the past, and which is now
breaking down. It involves a fundamental change
in the position both of employers and of trade unions.
As long as the direction of industry is in the
hands of property-owners or their agents, who are

THE NEW CONDITION OF EFFICIENCY 191

concerned to extract from it the maximum profit
for themselves, a trade union is necessarily a de-
fensive organization. Absorbed, on the one hand,
in the struggle to resist the downward thrust of
Capitalism upon the workers' standard of Hfe, and
denounced, on the other, if it presumes, to " inter-
fere with management," even when management
is most obviously inefficient, it is an opposition
which never becomes a government, and which
has neither the will nor the power to assume re-
sponsibility for the quality of the service offered to
the consumer. If the abohtion of functionless
property transferred the control of production to
bodies representing those who performed construct-
ive work and those who consumed the goods
produced, the relation of the worker to the public
would no longer be indirect but immediate.
Associations which are now purely defensive
would be in a position, not merely to criticize and
oppose, but to advise, to initiate and to enforce
upon their own members the obhgations of the
craft.

(c) The need of a new Economic Psychology.

It is obvious that in such circumstances the
service offered the consumer, however carefully
safeguarded by his representation on the author-
ities controlling each industry, would depend
primarily upon the success of professional organiza-
tions in finding a substitute for the discipline exer-
cised to-day by the agents of property-owners. It
would be necessary for them to maintain by their
own action the zeal, efficiency and professional
pride which, when the barbarous weapons of the

192 THE ACQUISITIVE SOCIETY

nineteenth century have been discarded, would be
the only guarantee of a high level of production.
Nor, once this new function has been made possi-
ble for professional organizations, is there any
extravagance in expecting them to perform it
with reasonable competence.

How far economic motives are baulked to-day and
could be strengthened by a different type of in-
dustrial organization, to what extent, and under
what conditions, it is possible to enlist in the
services of industry motives which are not purely
economic, can be ascertained only after a study of
the psychology of work which has not yet been
made. Such a study, to be of value, must start by
abandoning the conventional assumptions, popu-
larized by economic textbooks and accepted as self-
evident by practical men, that the motives to effort
are simple and constant in character, like the
pressure of steam in a boiler, that they are identical
throughout all ranges of economic activity, from the
stock exchange to the shunting of wagons or the
laying of bricks, and that they can be elicited and
strengthened only by directly economic incentives.

In so far as motives in industry have been con-
sidered hitherto, it has usually been done by writers
who, like most exponents of scientific management,
have started by assuming that the categories of
business psychology could be applied with equal
success to all classes of workers and to all types of
productive work. Those categories appear to be
derived from a simplified analysis of the mental
processes of the company promoter, financier or in-
vestor, and their validity as an interpretation of the
motives and habits which determine the attitude to

THE NEW CONDITION OF EFFICIENCY 193

his work of the bricklayer, the miner, the dock
labourer or the engineer, is precisely the point
in question.

Clearly there are certain types of industry to
which they are only partially relevant. It can
hardly be assumed, for example, that the degree of
skill and energy brought to his work by a surgeon, a
scientific investigator, a teacher, a medical officer
of health, an Indian civil servant and a peasant
proprietor are capable of being expressed precisely
and to the same degree in terms of the economic
advantage which those different occupations offer.
Obviously those who pursue them are influenced
to some considerable, though uncertain, extent
by economic incentives. Obviously, again, the
precise character of each process or step in the ex-
ercise of their respective avocations, the perfor-
mance of an operation, the carrying out of a piece
of investigation, the selection of a particular type
of educational method, the preparation of a report,
the decision of a case or the care of live stock, is not
immediately dependent upon an exact calculation
of pecuniary gain or loss.

What appears to be the case is that in certain
walks of life, while the occupation is chosen after a
consideration of its economic advantages, and while
economic reasons exact the minimum degree of
activity needed to avert dismissal from it or " fail-
ure," the actual level of energy or proficiency dis-
played depends largely upon conditions of a different
order. Among them are the character of the
training received before and after entering the
occupation, the customary standard of effort de-
manded by the public opinion of one's fellows, the

194 THE ACQUISITIVE SOCIETY

desire for the esteem of the small circle in which the
individual moves, the wish to be recognized as
having " made good " and not to have " failed,"
interest in one's work, ranging from devotion to a
determination to " do justice " to it, the pride of
the craftsman, the " tradition of the service."
It would be foolish to suggest that any consider-
able body of men are uninfluenced by economic
considerations. But to represent them as amenable
to such incentives only is to give a quite unreal and
bookish picture of the actual conditions under
which the work of the world is carried on. How
large a part such considerations play varies from one
occupation to another, according to the character
of the work which it does and the manner in which
it is organized. In what is called par excellence in-
dustry, calculations of pecuniary gain and loss are
more powerful than in most of the so-called profes-
sions, though even in industry they are more con-
stantly present to the minds of the business men who
" direct " it, than to those of the managers and
technicians, most of whom are paid fixed salaries, or
to the rank and file of wage-earners. In the
professions of teaching and medicine, and in many
branches of the public service, the necessary quali-
ties are secured, without the intervention of the
capitaHst employer, partly by pecuniary incentives,
partly by training and education, partly by the
acceptance on the part of those entering them of the
traditional obligations of their profession as a part of
the normal framework of their working lives. But
this difference is not constant and unalterable.
It springs from the manner in which different types
of occupation are organized, on the training which

THE NEW CONDITION OF EFFICIENCY 195

they offer, and on the morale which they cultivate
among their members. The psychology of a vo-
cation can in fact be changed ; new motives can be
elicited, provided steps are taken to allow them
free expression. It is as feasible to turn building
into an organized profession, with a relatively high
code of public honour, as it was to do the same for
medicine or teaching.

Suppose that the technical heads of a great in-
dustry, like mining or building, having undergone
some kind of conversion, should decide to throw in
their lot with the workers in it, and should take
thought with them, and with representatives of the
consumers, as to the ways of securing in future the
most effective service with the least economic com-
pulsion. How would they proceed ? Well,
clearly, in the first place, they would lay immense
stress upon training and selection. Quite apart
from the universal secondary education which
ought to be provided for all children up to sixteen —
in place of the miserable trickle of less than five per
cent, of the boys and girls leaving the elementary
schools who enter secondary schools to-day, only
to leave them again, in the majority of cases, soon
after their fifteenth birthday — quite apart from the
general and communal system of higher education,
they would develop a special type of training for
the youths from whom the future recruits of the
service would be drawn.

It would be partly a training in a specialized
technique, like that given in Schools of Mining —
the nucleus of such a system for the mining industry
— at the present day. But it would be even more
a discipline in professional ethics. It would aim at

196 THE ACQUISITIVE SOCIETY

driving home, as a fixed habit, a certain standard
of professional conduct. It would emphasize that
there were certain things — like advertizing, or
accepting secret commissions, or taking advantage
of a client's ignorance, or rigging the market, or
other analogous practices of the present commercial
world — which " the service can't do." It would
cultivate the esprit de corps which is natural to
young men, and would make them feel that to
snatch special advantages for oneself, like any
common business man, is, apart from other
considerations, an odious offence against good
manners. And since the disposition of all occupa-
tions— the " trades " quite as much as the " pro-
fessions " — is to relapse into well-worn ruts and to
make an idol of good average mediocrity, it would
impress upon them — what is one of the main truths
of all education whatsoever — that, if the young are
not always right, the old are nearly always wrong,
and that the first duty of youth is, not to avoid
mistakes, but to show initiative and take responsi-
bility, to make a tradition not to perpetuate one.
From such professional schools, working in close
conjunction with the Universities, would come the
candidates for admission to the profession. The
method of their selection would be as different
from that which obtains at present as would their
training. There would be no question, of course,
of giving a soft job to the youth with money or
influence, still less of " picking the cheapest."
They would obtain, at the end of their period of
training, diplomas or other professional qualifica-
tions, would spend the necessary number of years
in practical work, and would be engaged on the

THE NEW CONDITION OF EFFICIENCY 197

basis of their records. Once in the service, they
would be members of a profession from which the
grosser indignities of the present industrial world,
the beating down of salaries and wages, threats of
arbitrary dismissal and involuntary unemploy-
ment without payment, nepotism and jobbery, the
insolence of rich men and their servants, would be
excluded. Since the higher posts would be re-
cruited by ability, not, as now in the Civil Service,
by seniority, nor by what is worse, the favouritism
common in private business, every able man
would " carry a marshal's baton in his haver-
sack." If the pecuniary value of the largest
prizes were reduced, the stimulus offered to the com-
mon man would be enormously increased, since he
would know that it depended on himself to win them.
The motive of fear might be weaker than it is
to-day, but the motive of hope would be infinitely
stronger.

But knowledge is as important as zeal, and when
" the nose for money " is no longer regarded as a
virtue, it will become all-important. The profes-
sion would therefore have attached to it a body of
experts, engaged not in practising it, but in re-
search into its problems. It would be their busi-
ness to pioneer and investigate, to produce new
ideas and to bring them to the notice of the
practical men, to improve established methods, to
disturb complacent conservatism and to keep the
profession intellectually alive by a fresh current
of criticism and suggestion. Their discoveries would
be public ; there would be no corner in knowledge,
such as appears to be desired by the commercial
gentlemen who to-day wish to keep secret the dis-

198 THE ACQUISITIVE SOCIETY

coveries of the State-supported Bureau of In-
dustrial Research. The consumers, who would
have representation on the bodies governing the
industry, in the manner proposed (for example) by
Mr. Justice Sankey and the Miners' Federation,
would be able to appeal to their results as evidence
that a change of methods, which the profession might
dislike, was justified by the increase in economy or
eihciency which it would produce.

Is it unreasonable to suggest that such a com-
bination of intellectual and moral training, pro-
fessional pride, and organized knowledge would be
at least as effective an economic engine as the
struggle for personal gain which at present drives
the wheels of industry ? That question has hardly
been discussed by economists. For economic
science has never escaped from the peculiar bias
received from the dogmatic rationalism which
presided at its birth. Man seeks pleasure and
shuns pain. He desires riches and hates effort.
A simple, yet delicate, hedonistic calculus resides
in the bosom of " employer " and " labourer " ;
to that they will respond with the precision of a
needle to the magnetic pole, and they will respond
to nothing else. That doctrine has been expelled
from psychology and political science : the danger
to-day is that these studies should lay too little
stress upon reason, not too much, and forget that,
however unreasonable human beings may be
proved to be, the principal moral to be drawn is
that at any rate they should be as reasonable as
they can. But mere crude eighteenth century
rationalism still works havoc with the discussion
of economic issues, and, above all, of industrial

THE NEW CONDITION OF EFFICIENCY 199

organization. It is still used as a lazy substitute
for observation, and to suggest a simplicity of
motive which is quite foreign to the facts.

All that type of thought belongs to the dark
ages. The truth is that we ought radically to re-
vise the presuppositions as to human motives on
which current presentations of economic theory are
ordinarily founded, and in terms of which the dis-
cussion of economic questions is usually carried on.
The assumption that the stimulus of imminent
personal want is either the only spur, or a sufficient
spur, to productive effort is a relic of a crude
psychology which has little warrant either in past
history or in present experience. It derives what
plausibility it possesses from a confusion between
work in the sense of the lowest quantum of activity
needed to escape actual starvation, and the work
which is given, irrespective of the fact that ele-
mentary wants may already have been satisfied,
through the natural disposition of ordinary men to
maintain, and of extraordinary men to improve
upon, the level of exertion accepted as reason-
able by the public opinion of the group of which
they are members. It is the old difference, for-
gotten by society as often as it is learned, between
the labour of the free man and that of the slave.
Economic fear may secure the minimum effort
needed to escape economic penalties. What, how-
ever, has made progress possible in the past, and
what, it may be suggested, matters to the world
to-day, is not the bare minimum which is required
to avoid actual want, but the capacity of men to
bring to bear upon their tasks a degree
of energy, which, while it can be stimulated by

200 THE ACQUISITIVE SOCIETY

economic incentives, yields results far in excess of
any which are necessary merely to avoid the ex-
tremes of hunger or destitution.

That capacity is a matter of training, tradition
and habit, at least as much as of pecuniary stimulus,
and the ability to raise it of a professional
association representing the public opinion of a
group of workers is, therefore, considerable. Once
industry has been liberated from its subservience to
the interests of the functionless property-owner, it
is in this sphere that trade unions may be expected
increasingly to find their functions. Its import-
ance both for the general interests of the com-
munity and for the special interests of particular
groups of workers can hardly be exaggerated. Tech-
nical knowledge and managerial skill are likely to be
available as readily for a committee appointed by
the workers in an industry as for a committee
appointed, as now, by the shareholders. But it is
more and more evident to-day that the crux of the
economic situation is not the technical deficiencies of
industrial organization, but the growing inability of
those who direct industry to command the active
good will of the personnel. Their co-operation is
promised by the conversion of industry into a
profession serving the public, and promised, as far
as can be judged, by that alone.

Nor is the assumption of the new and often dis-
agreeable obligations of internal discipline and
public responsibility one which trade unionism can
afford, once the change is accomplished, to shirk,
however alien they may be to its present traditions.
For ultimately, if by slow degrees, power follows the
ability to wield it ; authority goes with function.

THE NEW CONDITION OF EFFICIENCY 201

The workers cannot have it both ways. They
must choose whether to assume the responsibihty
for industrial discipHne and become free, or to
repudiate it and continue to be serfs. If, organ-
ized as professional bodies, they can provide a more
effective service than that which is now, with in-
creasing difficulty, extorted by the agents of capital,
they will have made good their hold upon the future.
If they cannot, they will remain among the less
calculable instruments of production which many
of them are to-day. The instinct of mankind
warns it against accepting at their face value
spiritual demands which cannot justify themselves
by practical achievements. And the road along
which the organized workers, like any other class,
must climb to power, starts from the provision of
a more effective economic service than their mas-
ters, as their grip upon industry becomes increas-
ingly vacillating and uncertain, are able to supply.

X

THE POSITION OF THE BRAIN WORKER

{a) The Growth of an Intellectual Proletariat.
The conversion of industry into a profession will
involve at least as great a change in the position of
the management as in that of the manual workers.
As each industry is organized for the performance of
function, the employer will cease to be a profit
maker and become what, in so far as he holds his
position by a reputable title, he already is, one
workman among others.

In some industries, where the capitaHst is a
manager as well, the alteration may take place
through such a limitation of his interest as a capital-
ist as it has been proposed by employers and workers
to introduce into the building industry. In others,
where the whole work of administration rests on the
shoulders of salaried managers, it has already in part
been carried out. The economic conditions of this
change have, indeed, been prepared by the separa-
tion of ownership from management, and by the
growth of an intellectual proletariat to whom the
scientific and managerial work of industry is in-
creasingly entrusted. The concentration of busi-
nesses, the elaboration of organization, and the
developments springing from the application of
science to industry have resulted in the multipli-
cation of a body of industrial brain workers, whose
existence makes the old classifications into '' em-
ployers and workmen," which is still current in

THE POSITION OF THE BRAIN WORKER 203

common speech, an absurdly misleading description
of the industrial system as it exists to-day.

This growth of a class of managers, under-
managers, experts, and technicians, who do an
ever-increasing part of the scientific and construc-
tive work of industry, but who have no voice in
its government, and normally no share in its
profits, is one of the most impressive economic
developments of the last thirty years. It marks
the emergence within the very heart of capitalist
industry of a force which, both in status and in
economic interest, is allied to the wage-earners
rather than to the property-owners, and the support
of which is, nevertheless, vital to the continuance
of the existing order. Almost the most important
industrial question of the immediate future is in
what direction it will throw its weight. So far as
can be judged at present, the salaried brain-workers
appear to be undergoing the same gradual conversion
to a cautious and doctrineless trade unionism as
took place among the manual workers in the
nineteenth century. Mine-managers, under-mana-
gers, and surveyors all have their trade unions.
The Railway Clerks' Association, with its 90,000
members, includes station-masters, inspectors, and
other supervisory grades. Bank officers, insurance
officials, pottery managers, technical engineers, not
to mention clerks and foremen, are organized in their
respective associations. A considerable number of
organizations of brain-workers are united in the
National Federation of Professional Workers.

To complete the transformation all that is needed
is that this new class of officials, who fifty years ago
were almost unknown, should recognize that they,

204 THE ACQUISITIVE SOCIETY

like the manual workers, are the victims of the
domination of property, and that both professional
pride and economic interest require that they
should throw in their lot with the rest of those who
are engaged in constructive work. Their position
to-day is often, indeed, very far from being a happy
one. Many of them, like some mine managers, are
miserably paid. Their tenure of their posts is
sometimes highly insecure. Their opportunities
for promotion may be few, and distributed with a
singular capriciousness. They see the prizes of
industry awarded by favouritism, or by the nepot-
ism which results in the head of a business un-
loading upon it a family of sons whom it would be
economical to pay to keep out of it, and which,
indignantly denounced on the rare occasions on
which it occurs in the public service, is so much the
rule in private industry that no one even questions
its propriety. During the war they have found
that, while the organized workers have secured
advances, their own salaries have often remained
almost stationary, because they have been too
genteel to take part in trade unionism, and that to-
day they are sometimes paid less than the men for
whose work they are supposed to be responsible.
Regarded by the workmen as the hangers-on of the
masters, and by their employers as one section
among the rest of the " hands," they have the odium
of capitalism without its power or its profits.
From the conversion of industry into a profession
those who at present do its intellectual work have
as much to gain as the manual workers. For the
principle of function, for which we have pleaded
as the basis of industrial organization, supplies the

THE POSITION OF THE BRAIN WORKER 205

only intelligible standard by which the powers and
duties of the different groups engaged in industry
can be determined. At the present time no such
standard exists. The social order of the pre-
industrial era, of which faint traces have survived
in the forms of academic organization, was marked
by a careful grading of the successive stages in the
progress from apprentice to master, each of which
was distinguished by clearly defined rights and
duties, varying from grade to grade and together
forming a hierarchy of functions. The industrial
system which developed in the course of the nine-
teenth century did not admit any principle of
organization other than the convenience of the
individual, who by enterprise, skill, good fortune,
unscrupulous energy or mere nepotism, happened
at any moment to be in a position to wield economic
authority. His powers were what he could ex-
ercise ; his rights were what at any time he could
assert. The Lancashire mill-owner of the fifties
was, like the Cyclops, a law unto himself. Hence,
since subordination and discipline are indispensable
in any complex undertaking, the subordination
which emerged in industry was that of servant to
master, and the discipline such as economic strength
could impose upon economic weakness.

The alternative to the allocation of power by the
struggle of individuals for self-aggrandizement is its
allocation according to function, that each group in
the complex process of production should wield so
much authority as, and no more authority than, is
needed to enable it to perform the special duties
for which it is responsible. An organization of
industry based on this principle does not imply the

2o6 THE ACQUISITIVE SOCIETY

merging of specialized economic functions in an un-
differentiated industrial democracy, or the ob-
literation of the brain workers beneath the sheer
mass of artisans and labourers. But it is incom-
patible with the unlimited exercise of economic
power by any class or individual. It would have as
its fundamental rule that the only powers which
a man can exercise are those conferred upon him
in virtue of his office.

There would be subordination. But it would be
profoundly different from that which exists to-day.
For it would not be the subordination of one man to
another, but of all men to the purpose for which in-
dustry is carried on. There would be authority.
But it would not be the authority of the individual
who imposes rules in virtue of his economic power
for the attainment of his economic advantage. It
would be the authority springing from the necessity
of combining different duties to attain a common
end. There would be discipline. But it would
be the discipline involved in pursuing that
end, not the discipline enforced upon one man
for the convenience or profit of another.

Under such an organization of industry the brain
worker might expect, as never before, to come to his
own. He would be estimated and promoted by his
capacity, not by his means. He would be less
likely than at present to find doors closed to him
because of poverty. His judges would be his
colleagues, not an owner of property intent on
dividends. He would not suffer from the perver-
sion of values which rates the talent and energy by
which wealth is created lower than the possession of
property, which is at best their pensioner and at

T?IE POSITION OF THE BRAIN WORKER 207

worst the spend-thrift of what inteUigence has pro-
duced. In a society organized for the encourage-
ment of creative activity those who are esteemed
most highly will be those who create, as in a world
organized for enjoyment they are those who own.

(Z>) 7 he Position of the Mine-Manager under
Nationalisation,

Such considerations are too general and abstract
to carry conviction. Greater concreteness may be
given them by comparing the present position of
mine-managers with that which they would occupy
were effect given to Mr. Justice Sankey's scheme for
the nationalization of the Coal Industry. A body
of technicians who are weighing the probable
effects of such a reorganization will naturally con-
sider them in relation both to their own professional
prospects and to the efficiency of the service of
which they are the working heads. They will
properly take into account questions of salaries,
pensions, security of status and promotion. At the
same time they will wish to be satisfied as to points
which, though not less important, are less easily
defined. Under which system, private or public
ownership, will they have most personal discretion
and authority over the conduct of matters within
their professional competence ? Under which will
they have the best guarantee that their special
knowledge will carry due weight, and that, when
handling matters of art, they will not be overridden
or obstructed by amateurs ?

As far as the specific case of the Coal Industry is
concerned, the question of security and salaries need
hardly be discussed. The greatest admirer of the
present system would not argue that security of

2o8 THE ACQUISITIVE SOCIETY

status is among the advantages which it offers to its
employees. It is notorious that, in some districts
at least, managers are liable to be dismissed, how-
ever professionally competent they may be, if they
express in public views which are not approved by
the directors of their company. Indeed, the
criticism which is normally made on the public
services, and made not wholly without reason, is
that the security which they offer is excessive. On
the question of salaries rather more than one-half
of the colliery companies of Great Britain them-
selves supplied figures to the Coal Industry Com-
mission.* If their returns may be trusted, it would
appear that mine-managers, as a class, are paid
salaries the parsimony of which is the more sur-
prising in view of the emphasis laid, and quite
properly laid, by the mine-owners on the managers'
responsibilities. The service of the State does not
normally offer, and ought not to offer, financial
prizes comparable with those of private industry.
But it is improbable, had the mines been its pro-
perty during the last ten years, that more than one-
half the managers would have been in receipt of
salaries of less than ^£401 per year in 191 3, and of less
than ^500 in 191 9, by which time prices had more
than doubled, and the aggregate profits of the mine-

♦The Coal Mines Department supplied the following figures to
the Coal Industry Commission (Vol. III., App. 66). They relate to
57 per cent, of the collieries of the United Kingdom.

Salary, including bonus and Number of Managers

value of house and coal 1913 1919

;^ioo or less 4 2

;^ioi to ;^20o 134 3

;^20I to ;^300 280 29

^301 to ;?400 161 251

;^40I to 2500 321 213

£501 to ;^6oo 57 146

;^6oi and over 50 152

THE POSITION OF THE BRAIN WORKER 209

owners (of which the greater part was, however,
taken by the State in taxation) had amounted in
five years to £160,000,000.

It would be misleading to suggest that the
salaries paid to mine-managers are typical of
private industry, nor need it be denied that
the probable effect of turning an industry into
a public service would be to reduce the size of
the largest prizes at present offered. What is to be
expected is that the lower and medium salaries
would be raised, and the largest somewhat dimin-
ished. It is hardly to be denied, at any rate, that
the majority of brain workers in industry have
nothing to fear on financial grounds from such a
change as is proposed by Mr. Justice Sankey. Under
the normal organization of industry, profits, it can-
not be too often insisted, do not go to them but to
shareholders. There does not appear to be any
reason to suppose that the salaries of managers in the
mines making more than 5/- profit a ton were any
larger than in those making under 3/-.

The financial aspect of the change is not, how-
ever, the only point which a group of managers or
technicians have to consider. They have also to
weigh its effect on their professional status. Will
they have as much freedom, initiative and authority
in the service of the community as under private
ownership ? How that question is answered de-
pends upon the form given to the administrative
system through which a pubHc service is conducted.
It is possible to conceive an arrangement under
which the life of a mine-manager would be made a
burden to him by perpetual recalcitrance on the
part of the men at the pit for which he is responsible.

210 THE ACQUISITIVE SOCIETY

It is possible to conceive one under which he
would be hampered to the point of paralysis by
irritating interference from a bureaucracy at head-
quarters. In the past some managers of ^' co-
operative workshops " suffered, it would seem,
from the former : many officers of Employment
Exchanges are the victims, unless common rumour
is misleading, of the latter. It is quite legitimate,
indeed it is indispensable, that these dangers
should be emphasized. The problem of reorgan-
izing industry is, as has been said above, a problem
of constitution making. It will be handled success-
fully only if the defects to which different types
of constitutional machinery are likely to be liable
are pointed out in advance.

Once, however, these dangers are realized, to
devise precautions against them appears to be a
comparatively simple matter. If Mr. Justice
Sankey's proposals be taken as a concrete example
of the position which would be occupied by the
managers in a nationalized industry, it will be seen
that they do not involve either of the two dangers
which are pointed out above. The manager will,
it is true, work with a Local Mining Council or pit
committee, which is to " meet fortnightly, or
oftener if need be, to advise the manager on all
questions concerning the direction and safety of the
mine," and " if the manager refuses to take the
advice of the Local Mining Council on any question
concerning the safety and health of the mine, such
question shall be referred to the District Mining
Council." It is true also that, once such a Local
Mining Council is formally established, the manager
will find it necessary to win its confidence, to lead

THE POSITION OF THE BRAIN WORKER 21 1

by persuasion, not by mere driving, to establish, in
short, the same relationships of comradeship and
goodwill as ought to exist between the colleagues
in any common undertaking. But in all this there
is nothing to undermine his authority, unless
" authority " be understood to mean an arbitrary
power which no man is fit to exercise, and which
few men, in their sober moments, would claim. The
manager will be appointed by, and responsible to,
not the men whose work he supervises, but the
District Mining Council, which controls all the pits
in a district, and on that council he will be repre-
sented.

Nor will he be at the mercy of a distant " clerk-
ocracy," overwhelming him with circulars and over-
riding his expert knowledge with impracticable
mandates devised in London. The very kernel of the
schemes advanced both by Mr. Justice Sankey and
by the Miners' Federation is decentralized adminis-
tration within the framework of a national system.
There is no question of " managing the industry
from Whitehall." The characteristics of different
coal-fields vary so widely that reliance on local
knowledge and experience are essential, and it is to
local knowledge and experience that it is proposed to
entrust the administration of the industry. The
constitution which is recommended is, in short,
not "Unitary" but "Federal." There will be
a division of functions and powers between central
authorities and district authorities. The former
will lay down general rules as to those matters
which must necessarily be dealt with on a national
basis. The latter will administer the industry
within their own districts, and, as long as they com-

212 THE ACQUISITIVE SOCIETY

ply with those rules and provide their quota of
coal, will possess local autonomy and will follow the
method of working the pits which they think best
suited to local conditions.

Thus interpreted, public ownership does not
appear to confront the brain worker with the
danger of unintelligent interference with his special
technique, of which he is, quite naturally, appre-
hensive. It offers him, indeed, far larger oppor-
tunities of professional development than are open
to all but a favoured few to-day, when con-
siderations of productive efficiency, which it is his
special metier to promote, are liable to be overridden
by short-sighted financial interests operating
through the pressure of a Board of Directors who
desire to show an immediate profit to their share-
holders, and who, to obtain it, will " cream " the
pit, or work it in a way other than considerations of
technical efficiency would dictate. And the inter-
est of the community in securing that the manager's
professional skill is liberated for the service of the
public, is as great as his own. For the economic
developments of the last thirty years have made the
managerial and technical personnel of industry the
repositories of public responsibilities of quite in-
calculable importance, which, with the best will in
the world, they can hardly at present discharge.

The most salient characteristic of modern in-
dustrial organization is that production is carried
on under the general direction of business men, who
do not themselves necessarily know anything of
productive processes. " Business " and " in-
dustry " tend to an increasing extent to form two
compartments, which, though united within the

THE POSITION OF THE BRAIN WORKER 213

same economic system, employ different types of
personnel^ evoke different qualities and recognize
different standards of efficiency and workmanship.
The technical and managerial staff of industry is,
of course, as amenable as other men to economic
incentives. But their special work is production,
not finance ; and, provided they are not smarting
under a sense of economic injustice, they want,
like most workmen, to " see the job done properly."
The business men who ultimately control industry
are concerned with the promotion and capitalization
of companies, with competitive selling and the
advertisement of wares, the control of markets, the
securing of special advantages, and the arrange-
ment of pools, combines and monopolies. They are
pre-occupied, in fact, with financial results, and are
interested in the actual making of goods only in so
far as financial results accrue from it.
{c) The Increasing Separation of " Business " and
Industry.
The change in organization which has, to a con-
siderable degree, specialized the spheres of business
and management is comparable in its importance
to that which separated business and labour a
century and a half ago. It is specially momentous
for the consumer. As long as the functions of
manager, technician and capitalist were combined,
as in the classical era of the factory system, in the
single person of " the employer," it was not un-
reasonable to assume that profits and productive
efficiency ran similarly together. In such cir-
cumstances the ingenuity with which economists
proved that, in obedience to " the law of substitu-
tion," he would choose the most economical

k

214 THE ACQUISITIVE SOCIETY

process, machine, or type of organization, wore a
certain plausibility. True, the employer might,
even so, adulterate his goods or exploit the labour of
a helpless class of workers. But as long as the
person directing industry was himself primarily
a manager, he could hardly have the training,
ability or time, even if he had the inclination, to
concentrate special attention on financial gains
unconnected with, or opposed to, progress in the
arts of production, and there was some justification
for the conventional picture which represented
" the manufacturer " as the guardian of the
interests of the consumer.

With the drawing apart of the financial and
technical departments of industry — with the
separation of " business " from " production " —
the link which bound profits to productive efficiency
is tending to be snapped. There are more ways
than formerly of securing the former without
achieving the latter ; and, when it is pleaded that
the interests of the captain of industry stimulate the
adoption of the most " economical " methods, and
thus secure industrial progress, it is necessary to ask
" economical for whom ? " Though the organiza-
tion of industry which is most efficient, in the sense
of offering the consumer the best service at the ,
lowest real cost, may be that which is most profit-
able to the firm, it is also true that profits are con-
stantly made in ways which have nothing to do
with efficient production, and which sometimes,
indeed, impede it.

The manner in which " business " may find that
the methods which pay itself best are those which
a truly " scientific management " would condemn i

THE POSITION OF THE BRAIN WORKER 215

may be illustrated by three examples. In the first
place, the whole mass of profits which are obtained
by the adroit capitalization of a new business, or the
reconstruction of one which already exists, have
hardly any connection with production at all.
When, for instance, a Lancashire cotton mill
capitalized at ^100,000 is bought by a London
syndicate which re-floats it with a capital of
3(^500,000 — not at all an extravagant case — what
exactly has happened ? In many cases the equip-
ment of the mill for production remains, after the
process, what it was before it. It is, however,
valued at a different figure, because it is anticipated
that the product of the mill will sell at a price
which will pay a reasonable profit not only upon the
lower, but upon the higher, capitalization. If the
apparent state of the market and prospects of the
industry are such that the public can be induced to
believe this, the promoters of the reconstruction
find it worth while to recapitalize the mill on the new
basis. They make their profit not as manufactur-
ers, but as financiers. They do not in any way add
to the productive efficiency of the firm, but they
acquire shares which will entitle them to an in-
creased return. Normally, if the market is favour-
able, they part with the greater number of them as
soon as they are acquired. But, whether they do
so or not, what has occurred is a process by which
the business element in industry obtains the right to
a larger share of the product, without in any way
increasing the efficiency of the service which is
offered to the consumer.

Other examples of the manner in which the con-
trol of production by " business " cuts across the

I

2i6 THE ACQUISITIVE SOCIETY

line of economic progress are the wastes of com-
petitive industry and the profits of monopoly. It
is obvious that the price paid by the consumer
includes marketing costs, which to a varying, but to
a large, extent are expenses not of supplying the
goods, but of supplying them under conditions
involving the expenses of advertisement and com-
petitive distribution. For the individual firm such
expenses, which enable it to absorb part of a rival's
trade, may be an economy : to the consumer of
milk or coal — to take two flagrant instances — they
are pure loss. Nor, as is sometimes assumed, are
such wastes confined to distribution. Technical
reasons are stated by railway managers to make
desirable a unification of railway administration
and by mining experts of mines. But, up to the
war, business considerations maintained the ex-
pensive system under which each railway company
was operated as a separate system, and still prevent
collieries, even collieries in the same district, from
being administered as parts of a single organization.
Pits are drowned out by water, because companies
cannot agree to apportion between them the costs
of a common drainage system ; materials are
bought, and products sold, separately, because
collieries will not combine ; small coal is left in to
the amount of millions of tons because the most
economical and technically efficient working of the
seams is not necessarily that which yields the
largest profit to the business men who control
production.

In this instance the wide differences in economic
strength which exist between different mines dis-
courage the unification which is economically

THE POSITION OF THE BRAIN WORKER 217

desirable ; naturally the directors of a company
which owns " a good thing " do not desire to merge
interests with a company working coal that is poor
in quality or expensive to mine. When, as in-
creasingly happens in other industries, competitive
wastes, or some of them, are eliminated by combina-
tion, there is a genuine advance in technical
efficiency, which must be set to the credit of
business motives. In that event, however, the
divergence between business interests and those of
the consumers is merely pushed, one stage further
forward. It arises, of course, over the question of
prices.

If any one is disposed to think that this picture
of the economic waste which accompanies the
domination of production by business interests is
overdrawn, he may be invited to consider the
criticism upon the system passed by the " efficiency
engineers," who are increasingly being called upon
to advise as to industrial organization and equip-
ment, and who, so far from being tainted with
Socialism, have been nurtured on the purest milk of
the Capitalist creed. '' The higher officers of the
corporation," writes Mr. H. L. Gantt, of a Public
Utility Company established in America during the
war, " have all without exception been men of the
* business ' type of mind, who have made their
success through financiering, buying, selling, etc.
. . . As a matter of fact it is well known that
our industrial system has not measured up as we
had expected. . . . The reason for its falling
short is undoubtedly that the men directing it had been
trained in a business system operated for -profits^ and
did not understand one operated solely for production.

21 8 THE ACQUISITIVE SOCIETY

This is no criticism of the men as individuals ; they
simply did not know the job, and, what is worse,
they did not know that they did not know it."

In so far, then, as " Business " and " Manage-
ment " are separated, the latter being employed
under the direction of the former, it cannot be
assumed that the direction of industry is in the
hands of persons whose primary concern is produc-
tive efficiency. That a considerable degree of
efficiency will result incidentally from the pursuit
of business profits is not, of course, denied. What
seems to be true, however, is that the main interest
of those directing an industry which has reached
this stage of development is given to financial
strategy and the control of markets, because the
gains which these activities offer are normally
so much larger than those accruing from the mere
improvement of the processes of production. It is
evident, however, that it is precisely that improve-
ment which is the main interest of the consumer.
He may tolerate large profits as long as they are
thought to be the symbol of efficient production.
But what he is concerned with is the supply of goods,
not the value of shares, and when profits appear to
be made, not by efficient production, but by skilful
financiering or shrewd commercial tactics, they
no longer appear meritorious.

If, in disgust at what he has learned to call
" profiteering," the consumer seeks an alternative to
a system under which production is controlled by
" business," he can hardly find it except by making
an ally of the managerial and technical personnel
of industry. They organize the service which he
requires ; they are relatively little impHcated,

THE POSITION OF THE BRAIN WORKER 219

either by material interest or by psychological bias,
in the financial methods which he distrusts ; they
often find the control of their professions by busi-
ness men, who are primarily financiers, irritating in
the obstruction which it offers to technical efficiency,
as well as sharp and close-fisted in its treatment of
salaries. Both on public and professional grounds
they belong to a group which ought to take the
initiative in promoting a partnership between the
producers and the public. They can offer the
community the scientific knowledge and specialized
ability which is the most important condition of
progress in the arts of production. It can offer
them a more secure and dignified status, larger
opportunities for the exercise of their special talents,
and the consciousness that they are giving the best
of their work and their lives, not to enriching a
handful of uninspiring, if innocuous, shareholders,
but to the service of the great body of their fellow-
countrymen. If the last advantage be dismissed
as a phrase — if medical officers of health, directors
of education, and directors of the Co-operative
Wholesale be assumed to be quite uninfluenced by
any consciousness of social service — the first two,
at any rate, remain. And they are considerable.
It is this gradual disengagement of managerial
technique from financial interests which would
appear to be the probable line along which "the em-
ployer" of the future will develop. The substitution
throughout industry of fixed salaries for fluctuating
profits would, in itself, deprive his position of half
the humiliating atmosphere of predatory enterprise
which embarrasses to-day any man of honour who
finds himself, when he has been paid for his services^

220 THE ACQUISITIVE SOCIETY

in possession of a surplus for which there is no
assignable reason. Nor, once large incomes from
profits have been extinguished, need his salary be
large, as incomes are reckoned to-day. It is said
that among the barbarians, where wealth is still
measured by cattle, great chiefs are described as
hundred-cow men. The manager of a great enter-
prise, who is paid ^^10,000 a year, might similarly be
described as a hundred-family man, since he receives
the income of a hundred families. It is true that
special talent is worth any price, and that a pay-
ment of j^i 0,000 a year to the head of a business
with a turnover of millions is economically a baga-
telle. But economic considerations are not the
only considerations. There is also " the point of
honour." And the truth is that these hundred-
family salaries are ungentlemanly.

When really important issues are at stake every
one realizes that no decent man can stand out for
his price. A general does not haggle with his
government for the precise pecuniary equivalent
of his contribution to victory. A sentry who gives
the alarm to a sleeping battalion does not spend
next day collecting the capital value of the lives he
has saved ; he is paid i/- a day and is lucky if he
gets it. The commander of a ship does not cram
himself and his belongings into the boats and leave
the crew to scramble out of the wreck as best they
can ; by the tradition of the service he is the last
man to leave.

" I want," Lord Haldane told the Coal Com-
mission, " to make the service of the State in
civilian things as proud a position as it is with the
Army and Navy to-day, and for there to be pubHc

THE POSITION OF THE BRAIN WORKER 221

spirit, public honour, and public recognition. Just
as you get the engineer officer who will throw a
bridge over a river with extraordinary skill, al-
though he seems to have no materials with which
to do it, so you may develop the same kind of
capacity in that officer when he deals with a
civilian problem." There is no reason why the
public should insult manufacturers and men of
business by treating them as though they were more
thick-skinned than generals and more extravagant
than privates. To say that they are worth a good
deal more than even the exorbitant salaries which
some of them get is often true. But it is beside the
point. No one has any business to expect to be paid
" what he is worth," for what he is worth is a
matter between his own soul and God. What he
has a right to demand, and what it concerns his
fellow-men to see that he gets, is enough to enable
him to perform his work. When industry is organ-
ized on a basis of function, that, and no more than
that, is what he will be paid. To do the managers
of industry justice, this whining for more money is a
vice to which they (as distinct from their share-
holders) are not particularly prone. There is no
reason why they should be. If a man has impor-
tant work, and enough leisure and income to enable
him to do it properly, he is in possession of as much
happiness as is good for any of the children of Adam.

XI

PORRO UNUM NECESSARIUM

So the organization of society on the basis of func-
tions, instead of on that of rights, implies three
things. It means, first, that proprietary rights
shall be maintained when they are accompanied
by the performance of service and abolished when
they are not. It means, second, that the pro-
ducers shall stand in a direct relation to the
community for whom production is carried on, so
that their responsibiHty to it may be obvious and
unmistakable, not lost, as at present, through their
immediate subordination to shareholders whose
interest is not service but gain. It means, in the
third place, that the obligation for the maintenance
of the service shall rest upon the professional
organizations of those who perform it, and that,
subject to the supervision and criticism of the
consumer, those organizations shall exercise so
much voice in the government of industry as may be
needed to secure that the obligation is discharged.
It is obvious, indeed, that no change of system or
machinery can avert those causes of social malaise
which consist in the egotism, greed, or quarrel-
someness of human nature. What it can do is to
create an environment in which those are not the
qualities which are encouraged. It cannot secure
that men live up to their principles. What it can
do is to establish their social order upon principles

PORRO UNUM NECESSARIUM 223

to which, if they please, they can live up and not
live down. It cannot control their actions. It can
offer them an end on which to fix their minds.
And, as their minds are, so, in the long run and with
J exceptions, their practical activity will be.

The first condition of the right organization of
industry is, then, the intellectual conversion
which, in their distrust of principles. Englishmen
are disposed to place last or to omit altogether. It
is that emphasis should be transferred from the
opportunities which it offers individuals to the
social functions which it performs ; that they
should be clear as to its end and should judge it
by reference to that end, not by incidental conse-
quences which are foreign to it, however brilliant
or alluring those consequences may be. What
gives its meaning to any activity which is not purely
automatic is its purpose. It is because the purpose
of industry, which is the conquest of nature for the
service of man, is neither adequately expressed in its
organization nor present to the minds of those
engaged in it, because it is not regarded as a function
but as an opportunity for personal gain or advance-
ment or display, that the economic life of modern
societies is in a perpetual state of morbid irritation.
If the conditions which produce that unnatural
tension are to be removed, it can only be effected
by the growth of a habit of mind which will approach
, questions of economic organization from the stand-
! point of the purpose which it exists to serve, and
j which will apply to it something of the spirit ex-
; pressed by Bacon when he said that the work of
" men ought to be carried on " for the glory of God
and the relief of men's estate."

224 THE ACQUISITIVE SOCIETY

Sentimental idealism ? But consider the alter-
native. The alternative is war ; and continuous
war must, sooner or later, mean something like
the destruction of civilization. The havoc which
the assertion of the right to unlimited economic
expansion has made of the world of States needs
no emphasis. Those who have lived from 19 14 to
1 92 1 will not ask why mankind has not progressed
more swiftlv ; they will be inclined to wonder that
it has progressed at all. For every century or
oftener it has torn itself to pieces, usually, since
1648, because it supposed prosperity was to be
achieved by the destruction of an economic rival ;
and, as these words are written, the victors in the
war for freedom, in defiance of their engagements
and amid general applause from the classes who
will suffer most from the heroics of their rulers,
are continuing the process of ruining themselves
in order to enjoy the satisfaction of more completely
ruining the vanquished. The test of the objects
of a war is the peace which follows it. Millions of
human beings endured for four years the extremes
of misery for ends which they believed to be but
little tainted with the meaner kinds of self-interest.
But the historian of the future will consider, not
what they thought, but what their statesmen did.
He will read the Treaty of Versailles ; and he will
be merciful if, in its provisions with regard to coal
and shipping and enemy property and colonies
and indemnities, he does not find written large
the Macht'Politik of the Acquisitive Society,
the natural, if undesired, consequence of which
is war.

There are, however, various degrees both of war

PORRO UNUM NECESSARIUM 225

and of peace, and it is an illusion to suppose that
domestic tranquillity is either the necessary, or the
probable, alternative, to military collisions abroad.
What is more probable, unless mankind succeeds
in basing its social organisation upon some moral
principles which command general acceptance, is
an embittered struggle of classes, interests, and
groups. The principle upon which our society
professed to be based for nearly a hundred years
after 1789 — the principle of free competition — has
clearly spent its force. In the last few years
Great Britain — not to mention America and Ger-
many— has plunged, as far as certain great indus-
tries are concerned, into an era of something like
monopoly with the same light-hearted recklessness
as a century ago it flung itself into an era of in-
dividualism. No one who reads the Reports of
Ithe Committee on Trusts appointed by the Ministry
of Reconstruction and of the Committees set up
under the Profiteering Act upon soap, or sewing
cotton, or oil, or half-a-dozen other products, can
retain the illusion that the consumer is protected
by the rivalry of competing producers. The choice
before him, to an increasing extent, is not between
competition and monopoly, but between a monopoly
which is irresponsible and private and a monopoly
which is responsible and public. No one who
observes how industrial agreements between work-
ers and employers are actually reached can fail to
see that they are settled by a trial of strength
between two compactly organized armies, who are
restrained from collision only by fear of its possible
consequences. Fear is a powerful, but a cap-
ricious, motive, and it will not always restrain

226 THE ACQUISITIVE SOCIETY

them. When prudence is overborne by rashness,
or when the hope of gain outweighs the apprehen-
sion of loss, there will be a collision. No man can
say where it will end. No man can even say with
confidence that it will produce a more tolerable
social order. It is idle to urge that any alternative
is preferable to government by the greedy
materialists who rule mankind at present, for
greed and materialism are not the monopoly of a
class. If those who have the will to make a better
society have not at present the power, it is con-
ceivable that, when they have the power, they too,
like their predecessors, may not have the will.
- So, in the long run, it is the principles which r
[ men accept as the basis of their social organization
I which matter. And the principle which we have
tried to put forward is that industry and property
and economic activity should be treated as func-
tions, and should be tested, at every point, by
their relation to a social purpose. Viewed from
that angle, issues which are insoluble when treated
on the basis of rights may be found more
susceptible of reasonable treatment. For a pur-
pose is, in the first place a principle of limita-
tion. It determines the end for which, and
therefore the hmits within which, an activity is to be
carried on. It divides what is worth doing from
what is not, and settles the scale upon which what
is worth doing ought to be done. It is, in the second
place, a principle of unity, because it supplies a
common end to which efforts can be directed, and
submits interests, which would otherwise conflict,
to the judgment of an over-ruling object. It is, in
the third place, a principle of apportionment or

PORRO UNUM NECESSARIUM 227

distribution. It assigns to the different parties of
groups engaged in a common undertaking the
place which they are to occupy in carrying it out.
Thus it estabhshes order, not upon chance or power,
but upon a principle, and bases remuneration not
upon what men can with good fortune snatch for
themselves, nor upon what, if unlucky, they can be
induced to accept, but upon what is appropriate to
their function, no more and no less, so that those
who perform no function receive no payment, and
those who contribute to the common end receive
honourable payment for honourable service.

Such a political philosophy implies that society
is not an economic mechanism, but a community
of wills which are often discordant, but which are
capable of being inspired by devotion to common
ends. It is, therefore, a religious one, and, if it
is true, the proper bodies to propagate it are the
Christian Churches. During the last two cen-
turies Europe, and particularly industrial Europe,
has seen the development of a society in which
what is called personal religion continues to be
taught as the rule of individual conduct, but in
which the very conception of religion as the in-
spiration and standard of social life and corporate
effort has been forgotten. The phenomenon is a
curious one. To suggest that an individual is not a
Christian may be libellous. To preach in pubHc
that Christianity is absurd is legally blasphemy.
To state that the social ethics of the New Testa-
ment are obligatory upon men in the business
affairs which occupy nine-tenths of their thought,
or on the industrial organization which gives our

228 THE ACQUISITIVE SOCIETY

society its character, is to preach revolution.
To suggest that they apply to the relations of
States may be held to be sedition. Such a creed
does not find it difficult to obey the injunction :
*' Render unto Cassar the things that are Caesar's
and unto God the things that are God's." To
their first hearers the words must have come with a
note of gentle irony, for to the reader of the New
Testament the things which are Caesar's appear to
be singularly few. The modern world is not
seriously inconvenienced by rendering to God the
things which are God's. They are not numerous,
nor are they of the kind which it misses.

The phenomenon is not the less singular because
its historical explanation is comparatively easy.
When the Church of England was turned into
the moral police of the State, it lost the inde-
pendence which might have enabled it to
maintain the peculiar and distinctive Christian
standard of social conduct — a standard which must
always appear paradoxical and extravagant to the
mass of mankind and especially to the powerful
and rich, and which only an effort of mind and will
perpetually renewed, perpetually sustained and
emphasized by the support of a corporate society,
can preserve in the face of their natural scepticism.
Deprived of its own vitality, it had allowed its
officers to become by the eighteenth century the
servile clients of a half-pagan aristocracy, to whose
contemptuous indulgence they looked for prefer-
ment. It ceased for some 200 years to speak its mind,
and, as a natural consequence, it ceased to have a
mind to speak. As an organization for common
worship it survived. As an organ of collective

PORRO UNUM NECESSARIUM 229

thought and of a common will it became negligible.

Had the Nonconformist societies, taken up the
testimony which the Church of England had
dropped, the Christian tradition of social ethics
might have continued to find an organ of expres-
sion. Among individual Puritans, as the teaching
of Baxter, or the life of Woolman, shows, it did,
indeed, survive. But the very circumstances of their
origin disposed the Nonconformist Churches to lay
only a light emphasis on the social aspects of
Christianity. They had grown up as the revolt
of the spirit against an overgrown formalism, an
artificial and insincere unity. They drew their
support largely from the earnest and sober piety of
the trading and commercial classes. Individualist
in their faith, they were individualist in their
interpretation of social morality. Insisting that
the essence of religion was the contact of the
individual soul with its Maker, they regarded the
social order and its consequences, not as the instru-
ment through which grace is mediated, or as steps
in the painful progress by which the soul climbs to
a fuller vision, but as something external, alien, and
irrelevant — something, at best, indifferent to per-
sonal salvation, and, at worst, the sphere of the
letter which killeth and of the reliance on works
which ensnares the spirit into the slumber of death.

In a society thus long obtuse to one whole
aspect of the Christian Faith, it was natural that
the restraints imposed on social conduct by mere
tradition, personal kindliness, the inertia of use and
wont should snap like green withies before the
intoxicating revelation of riches which burst on
the early nineteenth century. It was the more

230 THE ACQUISITIVE SOCIETY

natural because the creed which rushed into the
vacuum was itself a kind of religion, a persuasive, self-
confident and mihtant Gospel proclaiming the ab-
solute value of economic success. The personal piety
of the Nonconformist could stem that creed as little
as the stiff conservatism of the Churchman. Indeed,
with a few individual exceptions, they did not try
to stem it, for they had lost the spiritual independ-
ence needed to appraise its true moral significance.
So they accepted without misgiving the sharp
separation of the sphere of Christianity from that
of economic expediency, which was its main assump-
tion, and aihrmed that reHgion was a thing of the
spirit, which was degraded if it were externalised.

" In the days when Ohver, master of the Schools
at Cologne, preached the Crusade against the
Saracens," a certain rich miller, who was also a
usurer, heard, as he lay in bed, an unwonted
rumbling in his mill. He opened the door, and
saw two coal-black horses, and by their side an
ill-favoured man as black as they. It was the
devil. The fiend forced him to mount, and rode
with him to hell, where, amid the torments of
others who had been unscrupulous in the pursuit
of gain, he saw " a burning fiery chair, wherein
could be no rest, but torture and interminable
pain," and was told, " Now shalt thou return to
thy house, and thou shalt have thy reward in this
chair." The miller died unconfessed, and the
priest who, in return for a bribe, buried him in
consecrated ground, was suspended from his office.

The fancies of an age which saw in economic
motives the most insidious temptation to the dis-
regard of moral principles may serve to emphasise,

PORRO UNUM NECESSARIUM 231

by the extravagance of the contrast, the perils of
one in which the economic motive is regarded as
needing no higher credential. The idea that con-
duct which is commercially successful may be
morally wicked is as unfamiUar to the modern
world as the idea that a type of social organization
which is economically eihcient may be inconsistent
with principles of right. A dock company which
employs several thousand casual labourers for three
days a week, or an employers' association, which uses
its powerful organization to oppose an extension of
education, in order that its members may continue
to secure cheap child labour, or a trade union
which sacrifices the public to its own professional
interests, or a retail firm which pays wages that
are an incentive to prostitution, may be regarded
as incompetent in its organization or as deficient
in the finer shades of public spirit. But neither
they, nor the community which may profit by
their conduct, are regarded as guilty of sin, even
by those whom professional exigencies have com-
pelled to retain that unfashionable word in their
vocabulary.

The abdication by the Christian Churches of
one whole department of life, that of social and
political conduct, as the sphere of the powers of
this world and of them alone, is one of the capital
revolutions through which the human spirit has
passed. The mediaeval church, with all its extrava-
gances and abuses, had asserted the whole compass
of human interests to be the province of religion.
The disposition to idealise it in the interests of some
contemporary ecclesiastical or social propaganda is
properly regarded with suspicion. But, though

I

232 THE ACQUISITIVE SOCIETY

the practice of its officers was often odious, it
cannot be denied that the essence of its moral
teaching had been the attempts to uphold a rule
of right, by which all aspects of human conduct
were to be judged, and which was not merely to
be preached as an ideal, but to be enforced as a
practical obligation upon members of the Christian
community. It had claimed, however grossly the
claim might be degraded by political intrigues and
ambitions, to judge the actions of rulers by a
standard superior to political expediency. It had
tried to impart some moral significance to the
ferocity of the warrior by enlisting him in the
service of God. It had even sought, with a self-
confidence which was noble, if perhaps over-san-
guine, to bring the contracts of business and the
transactions of economic life within the scope of
a body of Christian casuistry.

The Churches of the nineteenth century had no
strong assurance of the reality of any spiritual
order invisible to the eye of sense, which was to
be upheld, however much it might be derided,
however violent the contrast which it offered to
the social order created by men. Individuals
among their officers and members spoke and acted
as men who had ; but they were rarely followed,
and sometimes repudiated. Possessing no absolute
standards of their own, the Churches were at the
mercy of those who did possess them. They
relieved the wounded, and comforted the dying,
but they dared not enter the battle. For men will
fight only for a cause in which they believe, and
what the Churches lacked was not personal virtue,
or public spirit, or practical wisdom, but something

i

PORRO UNUM NECESSARIUM 233

more simple and more indispensable, something
which the Children of Light are supposed to impart
to the children of this world, but which they could
not impart, because they did not possess it — faith
in their own creed and in their vocation to make
it prevail. So they made religion the ornament of
leisure, instead of the banner of a Crusade. They
became the home of " a fugitive and cloistered
virtue, unexercized and unbreathed, that never
sallies out and seeks her adversary, but slinks out
of the race, where that immortal garland is to be
run for, not without dust and heat." They
acquiesced in the popular assumption that the
acquisition of riches was the main end of man,
and confined themselves to preaching such personal
virtues as did not conflict with its achievement.

The world has now sufficient experience to judge
the truth of the doctrine — the Gospel according to
the Churches of Laodicea — which affirms that the
power of religion in the individual soul is nicely
proportioned to its powerlessness in society.
Whether the life of the spirit is made easier for the
individual by surrendering his social environment
to a ruthless economic egotism is a question which
each man must answer for himself. In the sphere
of social morality the effect of that philosophy is
not dubious. The rejection of the social ethics of
Christianity was only gradually felt, because they
were the school in which individuals continued to
be educated long after other standards had taken
their place as the criterion for judging institutions,
policy, the conduct of business, the organization
of industry and public affairs. Its fruits,
though they matured slowly, are now being

\

234 THE ACQUISITIVE SOCIETY

gathered. In our own day the horrors which sixty
years ago were thought to be exorcised by the
advance of civiHzation have one by one rolled back,
the rule of the sword and of the assassin hired by
governments, as in Ireland, a hardly-veiled slavery,
as in East Africa, a contempt for international law
by the great Powers which would have filled an
earlier generation with amazement, and in England
the prostitution of humanity and personal honour
and the decencies of public life to the pursuit of
money.

These things have occurred before, in ages which
were nominally Christian. What is distinctive of
our own is less its occasional relapses or aberrations,
than its assumption that the habitual conduct and
organization of society is a matter to which reHgion
is merely irrelevant. That attempt to conduct
human affairs in the light of no end other than the
temporary appetites of individuals has as its
natural consequences oppression, the unreasoning
and morbid pursuit of pecuniary gain of which the
proper name is the sin of avarice, and civil war.
In so far as Christianity is taken seriously, it des-
troys alike the arbitrary power of the few and the
slavery of many, since it maintains a standard by
which both are condemned — a standard which men
did not create and which is independent of their
convenience or desires. By affirming that all men
are the children of God, it insists that the rights of
all men are equal. By affirming that men are men
and nothing more, it is a warning that those rights
are conditional and derivative — a commission of
service, not a property. To such a faith nothing is
common or unclean, and in a Christian society social

PORRO UNUM NECESSARIVM 135

institutions, economic activity, industrial organiza-
tion cease to be either indifferent or merely means
for the satisfaction of human appetites. They arc
judged, not merely by their convenience, but by
standards of right and wrong. They become
stages in the progress of mankind to perfection,
and derive a certain sacramental significance from
the spiritual end to which, if only as a kind of
squalid scaffolding, they are ultimately related.

Hence the opinion, so frequently expressed, that
the religion of a society makes no practical differ-
ence to the conduct of its affairs is not only con-
trary to experience, but of its very nature super-
ficial. The creed of indifferentism, detached from
the social order which is the greatest and most
massive expression of the scale of values that is
the working faith of a society, may make no
difference, except to damn more completely those
who profess it. But then, so tepid and self-regard-
ing a creed is not a religion. Christianity cannot
allow its sphere to be determined by the conve-
nience of politicians or by the conventional ethics
of the world of business. The whole world of
human interests was assigned to it as its province.
" The law of divinity is to lead the lowest through
the intermediate to the highest things." In
discharging its commission, therefore, a Christian
Church will constantly enter the departments of
politics and of economic relations, because it is
only a bad modern convention which allows men to
forget that these things, as much as personal conduct,
are the sphere of the spirit and the expression of
character. It will insist that membership in it
involves obedience to a certain rule of life, and the

r

236 THE ACQUISITIVE SOCIETY

renunciation of the prizes offered by economic
mastery.

A rule of life, a discipline, a standard and habit
of conduct in the social relations which make up
the texture of life for the mass of mankind — the
establishment of these among its own members,
and their maintenance by the corporate conscience
of the Christian society, is among the most vital
tasks of any Church which takes its religion
seriously. It is idle for it to expound the Christian
Faith to those who do not accept it, unless at the
same time it is the guardian of the way of life
involved in that Faith among those who nominally
do. Either a Church is a society, or it is nothing.
But, if a society is to exist, it must possess a cor-
porate mind and will. And if the Church, which is
a Christian Society, is to exist, its mind and will
must be set upon that type of conduct which is
specifically Christian. Hence the acceptance by
its members of a rule of life is involved in the very
essence of the Church. They will normally fail,
of course, to live up to it. But when it ceases
altogether to attract them, when they think it,
not the truest wisdom, but impracticable folly,
when they believe that the acceptance of Christian-
ity is compatible with any rule of life whatsoever
or with no rule of life at all, they have ceased, in
so far as their own choice can affect the matter,
to be members of the " Church militant here on
earth." When all its members — were that con-
ceivable— have made such a choice, that Church
has ceased to exist.

The demand that a Church should possess and
exercise powers of moral discipline is not, therefore,

PORRO UNUM NECESSARIUM 237

the expression of that absurd, if innocent, pose, a
romantic and undiscriminating Mediaevalism. Such
powers are a necessary element in the life of a
Church, because they are a necessary element in
the life of any society whatsoever. It is arguable
that a Church ought not to exist ; it is not arguable
that, when it exists, it should lack the powers
which are indispensable to any genuine vitality.
It ought to be the greatest of societies, since it is
concerned with the greatest and most enduring
interests of mankind. But, if it has not the
authority to discipline its own members, which is
possessed by the humblest secular association, from
an athletic club to a trade union, it is not a society
at all. The recovery and exercise of that authority
is thus among the most important of the practical
reforms in its own organization at which a Church,
if it does not already possess it, can aim, since,
without it, it cannot, properly speaking, be said
fully to exist.

If a Church reasserts and applies its moral
authority, if it insists that, while no man is
compelled to belong to it, membership involves
duties as well as privileges, if it informs its members
that they have assumed obligations which preclude
them from practising certain common kinds of
economic conduct and from aiming at certain types
of success which are ordinarily esteemed, two
consequences are likely to follow. It cannot, in
the first place, continue to be established. It will
probably, in the second place, lose the nominal
support of a considerable number of those who
regard themselves as its adherents. Such a decline
in membership will, however, be a blessing, not a

238 THE ACQUISITIVE SOCIETY

misfortune. The tradition of universal allegiance
which the Church — to speak without distinction
of denominations — has inherited from an age in
which the word " Christendom " had some meaning,
is a source, not of strength, but of weakness. It
is a weakness, because, in the circumstances of the
twentieth century, it is fundamentally, if uncon-
sciously, insincere. The position of the Church
to-day is not that of the Middle Ages. It resem-
bles more nearly that of the Church in the Roman
Empire before the conversion of Constantine.
Christians are a sect, and a small sect, in a Pagan
Society. But they can be a sincere sect. If they
are sincere, they will not abuse the Pagans, as
sometimes in the past they were inclined to do ;
for a good Pagan is an admirable person. But he
is not a Christian, for his hopes and fears, his
preferences and dislikes, his standards of success
and failure, are different from those of Christians.
The Church will not pretend that he is, or endeavour
to make its own Faith acceptable to him by diluting
the distinctive ethical attributes of Christianity till
they become inoffensive, at the cost of becoming
trivial.

" He hath put down the mighty from their seat^
and hath exalted the humble and meekP A society
which is fortunate enough to possess so revolution-
ary a basis, a society whose Founder was executed
as the enemy of law and order, need not seek to
soften the materialism of principalities and powers
with mild doses of piety administered in an apolo-
getic whisper. It will teach as one having author-
ity, and will have sufficient confidence in its Faith
to believe that it requires neither artificial pro-

PORRO UNUM NECESSARIUM 239

tcction nor judicious under-statement in order that
such truth as there is in it may prevail. It will
appeal to mankind, not because its standards are
identical with those of the world, but because they
are profoundly different. It will win its converts,
not because membership involves no change in
their manner of life, but because it involves a
change so complete as to be ineffaceable. It will
expect its adherents to face economic ruin for the
sake of their principles with the same alacrity as,
till recently, it was faced every day by the workman
who sought to establish trade unionism among his
fellows. It will define, with the aid of those of
its members who are engaged in different trades
and occupations, the lines of conduct and organiza-
tion which approach most nearly to being the
practical application of Christian ethics in the
various branches of economic life, and, having
defined them, will censure those of its members
who depart from them without good reason. It
will rebuke the open and notorious sin of the man
who oppresses his fellows for the sake of gain as
freely as that of the drunkard or adulterer. It will
voice frankly the judgment of the Christian con-
science on the acts of the State, even when to do
so is an offence to nine-tenths of its fellow-citizens.
Like Missionary Churches in Africa to-day, it will
have as its aim, not merely to convert the individ-
ual, but to make a new kind, and a Christian kind,
of civilization.

Such a religion is likely to be highly inconvenient
to all parties and persons who desire to dwell at
ease in Zion. But it will not, at any rate, be a
matter of indifference. The marks of its influence

240 THE ACQUISITIVE SOCIETY

will not be comfort, but revolt and persecution.
It will bring not peace but a sword. Yet its end
is peace. It is to harmonize the discords of human
society, by relating its activities to the spiritual
purpose from which they derive their significance.

Frate, la nostra volonta quieta

Virtu di carita, che fa voleme

Sol quel ch'avemo, e d'altro non ci asseta.

Se disiassimo esse piu superne,

Foran discordi gli nostri disiri

Dal volar di colui che qui ne cerne.

Anzi e form ale ad esto beato esse
Tenersi dentro alia divina voglia.
Per ch'una fansi nostre voglie stesscj

Chiaro mi fu allor com' ogni dove
In Cielo e paradiso, e si la grazia
Del sommo ben d'un modo non vi piove.

The famous lines in which Piccarda explains to
Dante the order of Paradise are a description of a
complex and multiform society which is united by
overmastering devotion to a common end. By that
end all stations are assigned and all activities are
valued. The parts derive their quality from their
place in the system, and are so permeated by the
unity which they express that they themselves are
glad to be forgotten, as the ribs of an arch carry the
eye from the floor from which they spring to the
vault in which they meet and interlace.

Such a combination of unity and diversity is
possible only to a society which subordinates its
activities to the principle of purpose. For what
that principle offers is not merely a standard for
determining the relations of different classes and

I

PORRO UNUM NECESSARIUM 241

groups of producers, but a scale of moral values.
Above all, it assigns to economic activity itself its
proper place as the servant, not the master, of
society. The burden of our civilization is not
merely, as many suppose, that the product of in-
dustry is ill-distributed, or its conduct tyrannical, or
its operation interrupted by embittered disagree-
ments. It is that industry itself has come to hold
a position of exclusive predominance among human
interests, which no single interest, and least of all
the provision of the material means of existence, is
fit to occupy. Like a hypochondriac who is so
absorbed in the processes of his own digestion that
he goes to his grave before he has begun to live,
industrialized communities neglect the very objects
for which it is worth while to acquire riches in their
feverish preoccupation with the means by which
riches can be acquired.

That obsession by economic issues is as local and
transitory as it is repulsive and disturbing. To
future generations it will appear as pitiable as the
obsession of the seventeenth century by religious
quarrels appears to-day ; indeed, it is less rational,
since the object with which it is concerned is less
important. And it is a poison which inflames
every wound and turns each trivial scratch into a
malignant ulcer. Society will not solve the par-
ticular problems of industry which afflict it, until
that poison is expelled, and it has learned to see
industry itself in the right perspective. If it is to do
that, it must rearrange its scale of values. It
must regard economic interests as one element in
hfe, not as the whole of life. It must persuade its
members to renounce the opportunity of gains

Q

^ oT^E ACQUISITIVE SOCIETY

which accrue without any corresponding service,
because the struggle for them keeps the whole
community in a fever. It must so organize its in-
dustry that the instrumental character of economic
activity is emphasized by its subordination to the
social purpose for which it is carried on.

1

HB Tawney, Richard Henry, 1 880-

199 1962.

.T35 The acquisitive society

1921